[Baron's] Tightening global supplies and rising demand for crude oil helped prices for the commodity start the year with a bang‐hitting their highest levels in more than three years‐and many analysts believe the market has the fuel it needs to continue the rally to as high as $80 a barrel."The reason that oil will soar is the oldest story in the oil world: Low prices created strong demand and growth, and now that demand is leading the way," says Phil Flynn, senior market analyst at Price Futures Group.
Oil futures suffered hefty declines in 2014 and 2015, as a global glut in supplies and the Organization of Petroleum Exporting Countries' unwillingness to significantly curb production amid fear of market-share loss sliced the per barrel oil price roughly in half.
On Friday, it notched its highest levels since December 2014, with West Texas Intermediate crude, the U.S. benchmark, settling at $64.30 a barrel on the New York Mercantile Exchange and global benchmark Brent crude ending at $69.87 on the ICE Futures Europe exchange.
Flynn expects WTI oil prices to average $67 in 2018, and says they will probably spend some time trading over $70. If OPEC keeps its crude production-cut deal till the end of this year, WTI prices could hit $80 a barrel, he says.
Texas is where it all began. Once a popular view in Beaumont’s Dixie Hotel: “Spindletop Viewing Her Gusher,” 1903. Texaco and Gulf got their start in the Beaumont area oilfields. Humble (now ExxonMobil) began at the at the nearby town of Humble.
Also known as the “Lucas Gusher” after Captain Anthony F. Lucas, a mining engineer who drilled on a hill, the oilfield produced 3.59 million barrels in its first year and an incredible 17.4 million barrels the next.