Crude oil futures up 0.76 pc on global cues

As a comparison, the US Energy Information Administration projects crude oil prices at US$57 per barrel for 2018. Iranian oil industry and shipping sources said protests have had no impact so far on oil production or exports.

The world began consuming a little more oil than it produced in the first three months of 2017, marking at least a temporary end of an oil-market oversupply that had lasted nearly three years.

Brent for March settlement rose 45 cents to $67.02 a barrel on the London-based ICE Futures Europe exchange after losing 30 cents on January 2.

US West Texas Intermediate (WTI) crude futures were at US$62.12 (RM249.35) a barrel at 0623 GMT, up 49 cents, or 0.8 per cent, from their last close.

Prices eased later in the day on the restart of major pipelines in Libya and the UK.

Fundamentally, the market is being supported by on-going cuts in production by OPEC and Russian Federation, and last week's pipeline explosion in Libya. However, price rise will be capped by booming shale output in the United States, which is not participating in the global deal to curb production.

"Even with the extension of Opec production quotas until the end of 2018, USA crude oil production still remains elevated at the near all-time high of 9.8 million barrels/day".

After strong capital investment in 2017, North American exploration and production companies would focus on boosting capital returns in 2018, though greater capital discipline would rein in this growth thereafter, Moody's said.

Oil prices had their highest January opening since 2014 today, supported by ongoing supply cuts led by OPEC and Russian Federation as well as strong demand.

The unrest in Iran has not affected the country's oil output, however.

More than a dozen people were reported dead in Iran after demonstrations against the rising cost of living boiled over to political unrest during the weekend.

Richard Mallinson, an analyst at consultancy Energy Aspects, told the Wall Street Journal that geopolitics will be "much more in focus now that we're in a tighter market". "But Iran needs customers for that oil and the United States sanctions will target the customers buying that extra 1 million barrels per day".

"In the $60-$70 price range, however, there is wide uncertainty regarding U.S. shale output response with estimates varying between 700,000 bpd to above one million bpd for 2018".

Vanessa Coleman