Dubai Mercantile Exchange (DME) reported that the Oman Crude is approaching the $60 per barrel mark for the first time in two yeas as it closed the day’s trading at $59.68 per barrel for the January 2018 delivery. There was an increase of $1.05 barrel from Tuesday’s prices.
Oil prices extended a rally which began in early October, largely driven by hopes that oil producing countries will agree to extend an output cut at their meeting at the end of this month.
Brent crude futures hit a two-year high of $61.41 per barrel on Tuesday and stood at $61.17 per barrel in Asia trade on Wednesday, up 0.4 percent.
U.S. crude futures held at $54.65 per barrel, up 0.5 percent on the day, staying near its eight-month high of $54.85 hit on Tuesday.
The spread between the two contracts reached $6.99 on Tuesday, hitting the widest in more than two years, due to worries about supply disruption from Kurdistan.
“Oil prices may have risen a bit too much already on expectations of the production cut extension. I would say Brent is likely to ease below $60 early next year,” said Tatsufumi Okoshi, senior commodity economist at Nomura Securities.