Crude oil prices for February delivery rose slightly on the New York and London markets on Dec. 28 pending release of the weekly US oil and product inventory report, scheduled for Dec. 29, which was a day later than normal because of the Christmas holiday.
US benchmark crude prices rose for a seventh consecutive session, closing at just above $54/bbl on Dec. 28, which was the highest settlement in more than 17 months.
Analysts attributed oil price support to plans by major producers to cut production levels starting in 2017. The Organization of Petroleum Exporting Countries and 11 non-OPEC nations, including Russia, agreed to trim a total of about 1.8 million b/d.
The production cut is intended to help reduce a worldwide oversupply of oil. Venezuela Oil Minister Eulogio Del Pino said he expects Brent benchmark prices on the London market will stabilize at $60-70/bbl as the market rebalances.
Traders and analysts are watching US production levels closely to see how unconventional oil and gas operators respond. The US Energy Information Administration outlines oil production levels as part of its oil and inventory report.
“We estimate that, based on an improved crude price outlook, shale gas and oil drilling will pick up again,” JBC Energy said in a research note.
The February crude oil contract on the New York Mercantile Exchange gained 16¢ on Dec. 28 to close at $54.06/bbl. The March contract rose 16¢ to $54.95/bbl.
The natural gas contract for January was up nearly 17¢ to a rounded $3.93/MMbtu. The Henry Hub spot market for gas closed at $3.66/MMbtu, down 1¢.
Heating oil for January edged down less than a penny to remain at a rounded $1.70/gal. Reformulated gasoline stock for oxygenate blending for January rose 2¢ to a rounded $1.67/gal.
The Brent crude contract for February on London’s ICE was up 13¢ to $56.22/bbl. The March contract also increased 13¢ to $56.96/bbl. Gas oil for January closed Dec. 28 at $500.50, down 50¢.
The average price for OPEC’s basket of benchmark crudes for Dec. 28 was unavailable.
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