Brent crude prices combined recent yields at about $70 per barrel on Tuesday, a level last seen on 2014’s dramatic oil market drop.
Prices have been motivated by output cuts led by OPEC nations and Russia, as well as by the strong demand on the back of a robust international economic growth.
On Tuesday, Brent crude futures LCOc1, the global standard for the price of oil, dropped 0.36 percent or 25 cents to $70.01 a barrel by 0455 GMT from yesterday’s last settlement.
Brent reached $70.37 per barrel on Monday, the strongest performance since December of 2014, which indicated the start of three years in the stagnant phase for oil prices.
United States West Texas Intermediate WTI crude futures was at $64.50 per barrel, gaining 0.3 percent or 20 cents from their last close. WTI reached a December high of $64.89 per barrel in its early trade.
According to Morgan Stanley, oil markets were undersupplied by 0.5 million bpd in the year 2017, and would still experience a 200,000 barrels per day deficit in the year 2018.
Morgan Stanley also added that Brent is expected to increase to about $75 per barrel by the third quarter of the year.
With the goal to pull up prices and restrict the market, the Organization of the Petroleum Exporting Countries (OPEC), together with Russia, began to cut production which started in January the previous year. The output curbs are expected to last through the year 2018.
The weakening dollar also triggers investment into liquid commodity futures such as crude oil and gold.
Instead of reaching 10 million bpd within the month, U.S. production C-OUT-T-EIA moved away from 9.8 million bpd in December to 9.5 million bpd today. In spite of the dip in bpd, U.S. production is still expected to surpass 10 million bpd soon.