Today, Oil Prices in Asian Markets are Relatively Stable
By : Abraham Sihombing And Aldo Bella Putra | Monday, November 13 2017 - 20:30 IWST
Kilang Minyak (Ilustrasi)
INDUSTRY.co.id - Singapore - The price of West Texas Intermediate (WTI) crude oil futures rose 7 cents to $ 56.81 a barrel. Meanwhile, the price of Brent crude rose 6 cents to US $ 63.58 per barrel in trading on Monday (13/11/2017) in Singapore.
Today's crude oil prices are relatively stable as market participants are being cautious of the tensions that are emerging in the Middle East after the US has seen an increase in the number of operating rigs.
The US move shows US oil producers are preparing to boost their crude output.
The average trader argues that the current price of crude oil is generally sustained by the decline in production of oil exporting countries incorporated in the Organization of Petroleum Exporting Countries (OPEC) and Russia.
The move by OPEC has contributed to a significant drop in excess supply that has weighed on the market since 2014. Furthermore, tensions in the Middle East will continue to increase supply disruptions.
Last weekend, Bahrain said the explosion that caused the main oil pipeline fire on Friday (10/11/2017), caused by sabotage. The incident allegedly linked the attack to Iran. However, it has been denied.
Despite tensions in the Middle East and OPEC supply cuts, traders are cautious of further price increases. That is due to the increase in American drilling activities for new production.
Meanwhile, the US oil drilling company, Baker Hughes, said, until November 10, 2017, there are 9 additional oil rigs operating in the US. It was the biggest addition since June. Therefore, there are now 738 oil rigs operating in the US.
The total operating rig is an early indicator of future oil production, much higher than 2016 which only operates 452 rigs. The condition also shows that the US petroleum industry is quite comfortable operating at the current level of crude oil prices.
US oil producers have raised production by more than 14% since mid-2016 to 9.62 million barrels per day. That resulted in decline in crude oil futures prices, on Friday (10/11/2017), from the highest level in 2 years ago until the beginning of last week.
Analysts cautioned that WTI and Brent crude prices are experiencing overbought conditions following price hikes in late October and early November, potentially increasing prices. (Abraham Sihombing)