Crude oil prices jumped Thursday to the highest since late 2014 amid speculations that Saudi Arabia set for pushing prices even higher. US crude oil inventories decreased over the last week, which also supports the bullish move in the market.
Tomorrow, OPEC and its partners will meet in Saudi Arabia, and market participants expect the group to announce its preliminary plans on prolongation of the deal in order to further support the global market. On Wednesday, it was reported that Saudi Arabia would like to see crude prices at $80 or even $100. This was taken as a signal that top oil exporter is committed to a longer-term cooperation in order to reach this goal for a successful Aramco IPO and funding its major economic reforms.
Brent broke above the $74 mark and refreshed three-and-a-half-year tops around $74,70. The bulls were also inspired by crude inventories fall in the US, despite production continued to rise. From the technical point of view, prices may challenge the next psychological barrier at $75. However, to do this, the market needs strong signals from the upcoming producers’ meeting due tomorrow.
By Helen Rush
Senior Analyst at Capital Markets