Although today the oil market seems generally unchanged with the WTI trading near $60.50 per barrel and the Brent at $66.74, investors are worried that the price of oil will begin to decline again.
On the one hand, the recent boost in the price of oil came as a result of a few unplanned events - pipeline outages in Libya and the North Sea, as well as unrest in OPEC member Iran. On the other hand, and perhaps an even bigger threat to rising oil prices, the United States seem poised to up their production of oil in order to benefit from the high prices right now.
While the initial concern over the protests going on in Iran affecting oil extraction negatively has somewhat eased, experts still expect Iran to be under pressure and off of its regular quotas during the unrest.
Furthermore, while it’s no secret that the United States have been increasing their oil supplies for years, it is somewhat surprisingly that Russia did the same in 2017. Russia volunteered to join OPEC’s agreement to cut oil production in order to balance the market, but its annual numbers (at a supposedly reduced rate of production) were still higher than the output of 2015 or 2016.
