Saudi Arabian Energy Minister Khalid al-Falih said on Wednesday that OPEC countries will be better served to keep the oil market tight than to abandon its production cuts. The comment, combined with the continually lower dollar, sent oil prices higher on Thursday. U.S. WTI futures were trading at $60.93 per barrel as of 10:50 a.m. GMT on Thursday, up 0.54 percent but down slightly from a high of $61.18 hit earlier in the session. Brent crude futures were trading at $64.44 per barrel, a modest 0.12 percent increase.
OPEC’s current policy is a production cut of 1.8 million barrels per day which is approximately 2 percent of the global oil supply. The production cuts started last year and are expected to extend until at least the end of 2018, in an effort to reduce the supply surplus that had previously been weighing on prices. However, despite OPEC’s noblest efforts, an increase in U.S. production poses a very real threat to oil prices. U.S. crude inventories increased last week by 1.8 million barrels, a significant number though slightly below analyst forecasts. As reported by the Energy Information Administration on Wednesday, U.S. crude production hit a record 10.27 million barrels per day, more than is produced by Saudi Arabia due to the country’s commitment to production cuts.
Bitcoin Finally Rebounds (a Bit)
Bitcoin climbed 9.7 percent on Wednesday and continued higher on Thursday after South Korean regulators took a less aggressive tone towards their proposed cryptocurrency regulation, subduing fears that crypto exchanges would be shut down imminently. Bitcoin passed the key $9,000 level on Wednesday to hit a 10-day high and was trading at $9,650 on Thursday morning in London. The most popular cryptocurrency is still down over $2,415 since last month.