Muscat: Oman’s marker price for its June 2019 shipment of crude oil rose on Monday to $70.49 (about OMR 27.14) per barrel, according to the Dubai Mercantile Exchange (DME).
The price rose by $1.54 (about 600 baisas) when compared to its price of $68.95 (OMR 26.55) on Saturday.
The price of oil for Oman’s September 2018 delivery rose to $88.96 per barrel, leading to the highest price per barrel since the recent plunge in 2015.
Oil prices for the first quarter of 2019 have posted their best quarterly performance since 2009.
Buoyed by signs of a tightening market, with Saudi Arabia taking the lead in curbing production, and a decline in production from the US, Russia, Canada, Libya and Iran among others, oil prices are expected to firm up during second and third quarter of the year.
Improving oil prices have also been driven by production cuts across several global producers in response to Organisation of Petroleum Exporting Countries (Opec’s) efforts to set production limits and commitments to the Vienna Agreement which have resulted in significant reductions in output by leading oil producers.
Opec-11 compliance reached 106 per cent in February, with aggregate production falling by 812 kb/d. Non-Opec compliance improved to 52 per cent in February, from 25 per cent in January of this year. Russia recently reiterated that it intends to fully comply soon.
Political turmoil has resulted in a supply adjustment, with output from Venezuela, Libya and Iran falling. Even in the US, supply has been less bullish. While US crude production continues to break new ground, the number of oil drilling rigs has fallen for six consecutive weeks, by 7.8% in 2019.
The 2019 budget [OMR5 billion] is based on an average oil price of US$58 a barrel.