With a few blips along the way, the first three quarters saw prices move upward, with strong trading activity in the physical markets, healthy demand and refining margins.
The bearish horizon that clearly weighed on market sentiment in 2016 and the uncertainties of 2017 all but vanished in the first nine months of this year, when stability returned to the market.
Yet all that was undone in the final quarter, when the massive equities selloff in the US, as well as interest rate rises, coincided with oil prices nosediving.
Here are some of the key factors that fueled the oil market this year:
1. Stock, oil markets moving together
The global equities collapse in the
2. OPEC+ success in stabilizing markets
This year proved that the historic OPEC+ agreement — in which the producer group and several others, led by Russia, agreed to slash oil output — could have success in helping to balance the market. Oil price movements have taken a gradual upward trend since the beginning of
3. IEA injects
Throughout much of 2018, the Paris-based International Energy Agency (IEA) neglected the largely bullish sentiment in the physical oil market — and instead put out pessimistic forecasts. For example, the IEA started to insinuate that the global oil market is firmly in the shale
4. Higher demand means there’s room for shale
Global oil demand recently passed the 100 million
5. US’ sudden waivers on Iran sanctions
Earlier this year, OPEC producers readied themselves to offset any supply shortages caused by US sanctions on Iranian oil exports, but the US surprised the market with waivers to eight of the major importers. That saw oil prices nosedive amid concerns over a surge in supplies. Yet OPEC+ reacted effectively to this sudden change in US sanctions, through its deal to cut outputs by 1.2 million