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Published: Tue, January 16, 2018
Economy | By Melissa Porter

Energy Agency Sees Oil Price Decline, But Analyst Predicts a Boom

Energy Agency Sees Oil Price Decline, But Analyst Predicts a Boom

His comments boosted prices, which rebounded from an earlier decline, though the market has not hit the heights it touched last Thursday, when Brent crude topped $70 a barrel for the first time in more than three years.

U.S. West Texas Intermediate (WTI) crude futures were at $63.14 a barrel, down 66 cents. Trading has been relatively slow because of the USA national holiday.

The agreement between the Organization of the Petroleum Exporting Countries and a group of non-OPEC producers led by Russian Federation reached in late 2016, to cut 1.8 million barrels of crude daily (MMBPD), is slated to run through the end of 2018.

Speaking in an industry conference held in UAE's Abu Dhabi, Luaibi said: "The market now is not 100 percent stable", adding that the current oil prices could be sustained, but there might be some fluctuations. "We're seeing the reality of strong demand and declining supplies".

Late in the week, prices received a boost after the United Arab Emirates' (UAE) oil minister hinted that an alliance between OPEC and non-OPEC producers, including Russian Federation, could continue in some way beyond their current deal to curb oil output.

Bank of America Merrill Lynch on Monday raised its 2018 Brent price forecast to $US64 a barrel from $US56, forecasting a deficit of 430,000 barrels per day (bpd) in oil production compared to demand this year. Oil, however, was also supported by production cuts by OPEC and Russian Federation.

"As we go through 2018 the market is also going to continue to look at geopolitical supply disruptions that could occur in Libya, Nigeria and Venezuela".

In other news, US energy companies added 10 oil rigs this week, the biggest increase since June.

U.S. energy companies added 10 oil rigs in the week to January 12, taking the number to 752, energy service firm Baker Hughes said on Friday.

Vienna-based consultancy JBC Energy expects U.

"From a fundamental perspective, the surge in United States managed money raises a clear red flag for us". We see the U.

Major oil producing-countries have grown concerned that as prices remain near these levels, it will spur additional production from USA shale plays, risking overwhelming the market with additional supply, and hurting OPEC's market share.

"I think it starts to get hard for us to get much higher from here", said John Kilduff, founding partner at energy hedge fund Again Capital.

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