5 things to watch as Brent nears $ 70 - FT

David Sheppard, Energy Markets Editor at the Financial Times (FT) enlists five key factors to watch out for as the prices of Brent crude oil near the $ 70 mark.

"5 Key Things:

1. Iran and rising geopolitical risks: While the protests have so far had no impact on crude oil output and are broadly seen as unlikely to directly unless they result in greater political upheaval in the country, traders are still watching closely for any fallout.
2. US shale and non-OPEC supply: The great hope of traders betting against the rally is that US shale and other non-OPEC supplies will grow faster than consumption this year.
3. Demand and the world economy: The strength of demand growth has been the little-told story of the oil price recovery with consumption expanding by almost 5m b/d between the start of 2015 and the end of 2017, compared with annual growth of well below 1m b/d when oil was above $100 a barrel.
4. OPEC and Russia strategy: Traders are looking to see if Russia — which has faced opposition to the cuts from domestic oil companies — and OPEC kingpin Saudi Arabia can agree an exit strategy that will stop a flood of barrels returning to the market.
5. Hedge funds: The market’s move into backwardation — where spot prices trade higher than contracts for delivery in later months — makes holding long financial bets in oil more attractive as investors can earn a yield each month by rolling positions forward."

Brent eased from $ 68.27, the strongest levels in three years, to trade near $ 67.80, as of writing.