Nigeria's excess crude earnings hit $22.1m in one day

This recent price jump suggests these efforts to rebalance the oil industry by cutting production through early 2018 are working.

But whether this demand growth is sustainable is also a key uncertainty, with question marks over whether Chinese policy makers will continue with stimulus, or whether they will ease off the infrastructure and construction spending that has driven fuel consumption.

Turkey's repeated threat to cut oil exports from the Kurdistan region in northern Iraq pushed the price of Brent close to $60.00 USA a barrel on Monday for the first time since June 2015.

Gains in energy futures boosted the commodities complex as Turkey said it could sever Kurdish exports passing through its territory on their way to the port of Ceyhan in protest over the region's referendum which began on Monday. "We have the tap. It's finished the moment we close it".

OPEC officials have said exports have a more direct impact on the worldwide supply than production.

Some countries had expressed concerns about increasing output from Nigeria and Libya.

John Kemp at Reuters points out that USA distillate stocks fell to just 139 million barrels by the end of last week, which was 25 million barrels below 2016 and 5 million barrels below the long-term seasonal average. OPEC secretary-general Mohammed Barkindo said this week that crude exports from the Middle East to Asian markets were expected to increase by 7.5 million barrels a day between 2016 and 2040, to 22 million barrels.

Oil prices fell on Thursday, with US crude giving up some of the previous session's gains that were driven by a surprise fall in inventories, while Brent moved further away from recent 26-month highs. Courvalin reiterated his year-end Brent forecast for $58 per barrel on strong fundamentals. However, "there could be a supply gap emerging, which could point to a tighter market", he said in Singapore on the sidelines of the S&P Global Platts APPEC Conference. This rise in oil inventories could be attributed to the damages caused to refineries on the US Gulf Coast during Hurricane Harvey.

US crude futures have increased 22% since June, a comeback that has pushed prices to around $52 a barrel.

Those in the oil market fearing a flood of Opec supply next year will probably be better off preparing for a shortage, according to Citigroup.

OPEC and its partners made a decision to extend its production cuts till March 2018 in Vienna on May 25, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.

As global inventory levels fall and oil supply aligns itself more closely to demand, the oil market's sensitivity to any unexpected disruption is growing.

  • Zachary Reyes