2017 OIL'S MOST BULLISH YEAR

CALGARY: Oil bulls are charging into the new year with unprecedented vigour, and the credit goes to the Organisation of Petroleum Exporting Countries [OPEC].

The signs that the group is winning its tug of war with shale are compelling, and money managers have taken note. Their combined bets on rising prices for West Texas Intermediate and Brent crude reached record levels in December.

''At least through the first half of 2018, they'll stay pretty bullish,'' said Ashley Petersen, lead oil market strategist at Stratas Advisors in New York,

''June will be a real turning point because that's when we'll hear about unwinding the deal, and if  OPEC doesn't handle it delicately, then there will be concern that the market will be flooded with oil again.''

The last week of the year saw futures trading above US$60 a barrel in New York and US$67 in London for the first time since mid 2015, after the two most important oil bench marks surged more than 40% from their doldrums in June.

The rally came on the back of well-orchestrated campaign led by Saudi Arabia and Russia to enforce and extend supply curbs implemented by OPEC and other producing nations.

The efforts culminated with a meeting in Vienna in November, where the group and its allies agreed to extend the cuts through the end of next year.

Meanwhile US crude stockpiles have declined by about a fifth since peaking in March and approached the end of the year at their lowest level since October 2015,

While the threat of too much shale production this year still looms, producers are ending the year a lot less gung-ho than they started.

Under pressure from investors to focus on profits over growth, explorers have slowed down on drilling with the US rig count stalling in December.

''The expectation is that the rebalance will continue,'' Gene McGillian, a market research manager at  Tradition Energy in Stamford, Connecticut, said by telephone. ''We've approached an area where we really need to see a steady of diet positive information.''