MARKET WATCH: Oil traders cautiously optimistic about 2017 production cut
The crude oil futures price for February delivery rose closer to $54/bbl on the New York market Dec. 27 while the February delivery price for Brent crude oil climbed above $56/bbl on the London market.
The Organization of Petroleum Exporting Countries has agreed to cut production by 1.2 million b/d starting Jan. 1, 2017, and some non-OPEC countries have agreed to cut production by 558,000 b/d (OGJ Online, Dec. 13, 2016).
“Right now the focus is going to be on the OPEC cut, which is why [oil] has found some gradual support,” said Amrita Sen, Energy Aspects chief oil analyst.
US oil production has climbed along with stronger oil prices, averaging 8.79 million b/d for the week ended Dec. 16, up from 8.43 million b/d in late July, US Energy Information Administration statistics showed in a Dec. 21 Petroleum Status Report.
EIA plans to release the next inventory report on Dec. 29, a day later than normal because federal offices were closed Dec. 26 for the Christmas holiday.
Analysts surveyed by S&P Global Platts said they expect a draw of 1.5 million b/d in US crude inventories for the week ended Dec. 23.
Energy prices
The February crude oil contract on the New York Mercantile Exchange gained 88¢ on Dec. 27 to close at $53.90/bbl. The March contract rose 87¢ to $54.79/bbl.
The natural gas contract for January was up nearly 10¢ to a rounded $3.76/MMbtu. The Henry Hub spot market for gas closed at $3.67/MMbtu.
Heating oil for January rose 3.6¢ to a rounded $1.70/gal. Reformulated gasoline stock for oxygenate blending for January rose 2.7¢ to a rounded $1.65/gal.
The Brent crude contract for February on London’s ICE was up 93¢ to $56.09/bbl. The March contract also increased 93¢ to $56.83/bbl. Gas oil for January closed Dec. 27 at $501/tonne.
The average price for OPEC’s basket of benchmark crudes for Dec. 27 was unavailable.
Contact Paula Dittrick at [email protected].
About the Author
Paula Dittrick
Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.