Brent stays above $61.10; near 2-year highs

According to latest estimates, Saudi Arabia will need to have oil prices trade above $60 per barrel for the economy to break even. According to the report, Saudi Arabia’s attempts to combine austerity, cuts to wasteful subsidies, new taxes and economic reforms are starting to bear fruit for the Gulf economy.

Brent remained over $60 a barrel today, after WTI crossed a bit over $54 a barrel but for the prices to sustain the numbers from shale production must remain steady. Any increase in US Shale production will offset any price gains in short term.

Brent futures, the international benchmark for oil prices, were at $61.15 per barrel at 0504 GMT, up 21 cents, or 0.34 percent, since their last close and near the $61.41 a barrel two-year high from intraday trading on Tuesday. Brent is up almost 38 percent since its 2017-lows last June.

U.S. West Texas Intermediate (WTI) crude was at $54.65 a barrel, up 27 cents, or 0.5 percent, and close to February highs. It is up almost 30 percent since 2017-lows in June.

Traders have been worried reports of market being undersupplied in last few quarters as inventory reports continue to show drawdowns. Russia, continues to uphold its decision to cut output by around 300,000 bpd below October 2016 levels of 11.247 million barrels per day.

What is unclear is how countries involved in withholding production will exit the supply-cutting deal, which ends in March 2018. Saudi Arabia and Russia support extending the agreement to potentially cover all of next year.