ASSESSMENTS

The Slippery Task of Balancing Supply and Demand in the Oil Market

Jan 12, 2018 | 19:47 GMT

A gasoline pump in London. Oil prices are up 59 percent since 2017 lows in June.

Oil prices are up 59 percent since 2017 lows in June. The price of Brent crude oil topped $70 per barrel briefly on Jan. 11 for the first time in more than three years.

(ANDREW COWIE/AFP/Getty Images)

Highlights

A number of factors including increased demand and continued production cuts are contributing to the rise in Brent crude oil prices.
Russia and many OPEC members view higher prices with cautious optimism. They've tried to curb production enough to keep oil prices stable without curbing it so much so as to direct investment to North American shale oil production or alternative energies.
There are conflicting views about how much U.S. production has actually increased and how sustainable the increase is, but many producer countries remain concerned.

The price of Brent crude oil topped $70 per barrel briefly Jan. 11 for the first time in more than three years. The rally in oil prices, which are up 59 percent since 2017 lows reached in June, has been driven by a number of forces, including increased demand and continued production cuts. Though breaking through the symbolic $70 price level for the international benchmark is music to the ears of some producers who have cut output, higher oil prices are both a blessing and a curse for Russia and many OPEC members that have sought to curb production to keep oil prices relatively stable without causing them to increase so much that they boost investment in North American shale oil production and alternative energies....

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