DUBAI: Oman crude oil prices on the Dubai Mercantile Exchange settled above US$60 per barrel for the first time in four months on Thursday, as prices continued to climb on signs of a slowdown in US shale oil production.
Front-month June DME Oman futures contract settled Friday at US$60.90 per barrel, up 68 cents on the previous close and the highest price since December 12, 2014. Oman prices have now gained US$17.55 per barrel from the six-year low of US$43.35 in mid-January, or 40.5 per cent.
According to a DME press release, the renewed strength this week came as the US Energy Information Administration forecast that shale production is set to fall by 57,000 barrels a day in May, suggesting US domestic output is close to peaking. Additionally, the latest inventory data from the US showed a smaller weekly build in oil stocks than the market had expected.
Christopher Fix, chief executive of DME, said, “The oil markets are certainly seeing some more bullish momentum at the moment, but whichever way the price goes from here, I’d expect continued volatility to be a major part of the story. In the first eight months of 2014, DME witnessed price moves of over two per cent in just two occasions, and since October 2014 till date DME has seen around 50 daily price moves of the same magnitude.”
SOURCE: Muscat Daily