Mubasher:  Oil prices were improving over the last period, hitting $70 per barrel, the highest level in three years, according to a report released by Qatar National Bank (QNB) on Sunday.

The report showed that a slew of factors that would drive oil prices to seesaw in 2018. 

While oil supplies dropped to 300,000 barrels per day (bpd) in 2017 from 900,000 pbd a year earlier on the back of OPEC output cut, the global demand surged, giving oil prices a much need shot in the arm, the report found.

The global trade volume increased by more than 4% in the second half of 2017, while the consumption of the US, the world’s top oil consumer, increased in Q4-17 amid declined oil inventories, which boosted the global oil demands, the QNB revealed.

The geopolitical tension in the GCC during 2017 resulted in instability and uncertainty regarding oil supply, which helped in raising the prices.

However, the growth of China’s imports is expected to slow down to 4.6% in 2018 versus 5.9% the year before, according to China National Petroleum Corporation (CNPC), which in return will slash the global demand, the QNB’s data showed.

“Perhaps the biggest risk [on demand] is US shale producers boosting production in response to the current high price environment,” the Qatar-based bank commented.

The US oil production is forecast to grow by 1 million bpd in 2018, compared to 800,000 bpd in December 2017, the US-based Energy Information Agency (EIA) unveiled in an offical statment.

“The bottom line, therefore, is that while the oil market has had an impressive run, prices could cool off in the $60-$65 per barrels range” owing to the impact of the above-mentioned factors on both of the supply and the demand, the report concluded.