Last week, the WTI benchmark rose $2 to more than US$57 per barrel — its highest level since mid-2015. While OPEC and other contributing non-OPEC members plan to extend oil production cuts through 2018, last week’s price increase was attributable to a crackdown on corruption in Saudi Arabia, as the king arrested several royal, political and business officials.
The move is driven by developments in Saudi Arabia in recent days and anticipation that the consolidation of power by King Salman and the Crown Price will continue. Meanwhile, Saudi comments on Lebanon have also highlighted rising tensions between the kingdom and Iran.
The growing confidence in the market that the upcoming OPEC meeting will result in an extension to the output-cut agreement is also supporting prices.
Still, traders expressed caution that the oil price rally may have run its course after pushing up Brent more than 40% since July 2017.