MARKET WATCH: NYMEX, Brent crude oil prices climbing after US Presidents Day

Oil prices gained on New York and London markets Feb. 21, which analysts attributed to growing optimism that world oil supply will tighten as major producers appeared to have largely complied in January with their promised production cuts.

Oil prices gained on New York and London markets Feb. 21, which analysts attributed to growing optimism that world oil supply will tighten as major producers appeared to have largely complied in January with their promised production cuts.

The New York Mercantile Exchange was closed on Feb. 20 for the US Presidents Day holiday. Olivier Jakob of Petromatrix said trading activity was low on the London’s ICE Feb. 20, contributing to only a modest price gain for Brent crude oil.

The April contract for Brent settled at $56.18/bbl, up 37¢, on Feb. 20. Gas oil for March closed at $497.50/tonne, up $7. The average price for The Organization of Petroleum Exporting Countries basket of benchmark crudes on Feb. 20 was $53.49/bbl, up 38¢.

OPEC and other major producers, including Russia, agreed in late 2016 to cut their production by 1.8 million b/d starting in January, The joint effort by OPEC and some non-OPEC producers is intended to support oil prices.

Producers and service and supply company representatives recently gathered in Houston for the North American Prospects Expo (NAPE). Raymond James & Associates Inc. hosted an annual NAPE dinner and asked participants to forecast Dec. 31 US light, sweet crude oil and natural gas future prices.

“The consensus shakes out that oil (WTI) will exit the year at roughly $55/bbl, relatively in-line with the current December oil contract, but far more bearish than our $75/bbl forecast,” RJA noted.

“Further, expectations for natural gas came in slightly lower than our estimate for 2017. Specifically, NAPE attendees expect gas prices to average roughly $2.93/MMbtu,” RJA said, noting that its analysts forecast NYMEX gas prices will end the year at $3.25/MMbtu.

Contact Paula Dittrick at paulad@ogjonline.com.

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