Dubai, 12 October 2016 –Dubai Mercantile Exchange said Tuesday that Oman crude oil breached a 12 month high of over $50 per barrel, as oil markets maintained the upward momentum after OPEC members pledged to curb output for the first time since 2008 at the late-September meeting in Algiers.
The price of Oman crude has now strengthened by over $7/barrel since the OPEC agreement, which is expected to be ratified at the producer group’s formal November meeting in Vienna. Market prices were further boosted this week by comments from President Vladimir Putin that Russia would support the production deal.
The recent upward spike has added around 17% to DME Oman crude since late September and more than 110% from the lowest levels in more than a decade seen at the start of the year.
Recent upward momentum is seen by some analysts as a sign of a further rebalancing of the supply/demand fundamentals, as the relatively low oil prices of the last two years continue to squeeze out the more costly US shale projects.
Owain Johnson, Managing Director, DME, said “2015-16 has been one of the most volatile periods for oil prices. In this high-volatility environment, producers and consumers are increasingly turning to DME to manage their risk. This trend is reinforcing the value of regulated exchange-based futures contracts to the Middle East oil market”
December-loading DME Oman futures contract settled 12:30 Dubai time at $50.23/b, the highest price since October 2015. Oman prices have now gained more than $25/b from the multi-year low in January.