The crude oil prices have continued to rise and peaked in Asian trade, amid continued production cuts by the Organization of Petroleum Exporting Countries (OPEC) and a balanced demand. Some analysts, however, warn that markets might be overheating.
The futures on US light crude oil with delivery in February rose by 0.73% to 63.42 USD per barrel, while the Brent variety increased by 0.41% to 69.10 USD per barrel. The upward trend in international capital markets also stimulates investors to diversify their portfolios and investments in the futures market for oil.
Last November, OPEC together with Russia and other countries extended the deal to reduce oil production, expecting the agreement to cover the entire 2018. The most affected by the decision are Europe and North America.
According to the latest data from the US Petroleum Institute, the oil reserves in the country have fallen by 11.2 million barrels to 416.5 million barrels for the week ending January 5. This is happening against the backdrop of an increase in world oil demand forecast in 2018 by 100,000 barrels per day. According to the US Energy Information Administration, the global demand for oil in 2019 will reach 101.76 million barrels per day, which will be 1.65 million barrels per day more than the current year.
In the long term, the oil prices are unlikely to increase significantly compared to current levels, and this highlights the need for diversification in many oil exporting countries, warned the World Bank.
With oil prices rising by 13% since early December, however, fears of overheating the market are rising. In the US, the production is expected to reach 10 million barrels per day, and in Asia the market now has enough stocks of the raw material.