Oil futures rebounded on the New York market Jan. 4, rising nearly $1 to settle above $53/bbl in a week of oil-price swings. The US benchmark oil price for February delivery on Jan. 3 briefly reached above $55/bbl for the first time since July 2015 while the Jan. 3 low was about $52/bbl.
The US Energy Information Administration was scheduled to release its weekly oil and products inventory on Jan. 5, a day later than normal because federal offices were closed on Jan. 2 for the New Year’s holiday. EIA planned to release its natural gas storage report on Jan. 5 as normal.
US natural gas futures fell this week after having doubled in price since March 2016. Analysts said the gas-price plunge indicates investors are becoming increasing jittery.
The Organization of Petroleum Exporting Countries agreed to cut production by 1.2 million b/d starting this month. Some non-OPEC producers agreed to cut 558,000 b/d with Russia alone to account for 300,000 b/d.
Saudi Aramco has raised prices for all major crude grades for delivery to the Far East, which analysts called a sign that Saudi Arabia is initiating production cuts as agreed.
Barclays Research Inc. analysts said they see price risks shewed to the upside for 2017 based on a high likelihood of disruption risk.
“Our analysis illustrates an important point: Politics are likely to matter just as much as economics,” a Barclays special report on the 2017 outlook said. “In particular, the new politics of populism and protectionist trade policies have the potential to disrupt global supply and demand assumptions for various commodities.” The report cited both UK and US politics.
The February crude oil contract on the New York Mercantile Exchange gained 93¢ on Jan. 4 to close at $53.26/bbl. The March contract also rose 93¢ to $54.22/bbl.
The natural gas contract for February was down 6¢ to a rounded $3.27/MMbtu. The Henry Hub spot market for gas closed at $3.37/MMbtu, down 2¢ on Jan. 4.
Heating oil for February gained 1.6¢ to a rounded $1.69/gal. Reformulated gasoline stock for oxygenate blending for February rose 2.4¢ to a rounded $1.65/gal.
The Brent crude contract for March on London’s ICE was up 99¢ to $56.46/bbl. The April contract also increased 95¢ to $57.09/bbl. Gas oil for January closed Jan. 4 at $490.50/tonne, down $3.25.
The average price for OPEC’s basket of benchmark crudes for Jan. 4 was $52.71/bbl, down 42¢.
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