The price of Oman crude oil on Dubai Mercantile Exchange has increased by nearly 100 per cent from the multi year lows set during January this year, as the upward momentum continued.
DME Oman futures contract for July was marked at 12:30pm Dubai time at US$47.16 per barrel on Tuesday, up 52 cents on the previous close and the highest exchange marker price since last October, DME said in a statement.
The lowest price of Oman crude oil for over a decade was set in January 2016 at US$23.72 per barrel. Falling shale output in the US and a number of production outages around the world in Canada, Nigeria and Venezuela have reduced global crude supplies and driven oil prices higher, the DME said in its statement.
The jump in the Oman oil price comes amid a surge of liquidity in DME Oman Crude Oil Futures. DME’s marker price on June 7 was underpinned by over six million barrels of trade, the highest volume seen in the five minute marker window since February 2014.
“The rebound in prices is probably a vindication of the OPEC policy of the past two years, although the trajectory for the balance of the year is likely to remain very volatile,” Owain Johnson, managing director of the DME, said.
Oil traded near the highest close in more than ten months before the US government data forecast to show crude stockpiles dropped for a third week, trimming a glut.
Brent for August settlement rose 23 cents to US$50.78 a barrel on the London-based ICE Futures Europe exchange. Prices on Monday closed at the highest since October 9.
Futures were little changed in New York after advancing 2.2 per cent on Monday, the biggest gain in three weeks. Inventories declined by three million barrels through June 3, according to a Bloomberg survey before data from the US Energy Information Administration on Wednesday.
Saudi Arabia will maintain the same level of production capacity until 2020 under a new economic reform plan approved by the government to reduce its reliance on oil.