U.S. crude oil prices settle at 17-month high after meagre gain

Energy - Mohit Shah - Dec 24,2016

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us crude oil prices settle at 17 month high after meagre gain

 

The gain, however, is seen as a small step since the market is sighting OPEC’s management towards planned output cuts against an expected production boost from Libya.

Brent LCOc1 futures gained 11 cents, or 0.2 percent, which settled at $55.16 a barrel; while U.S. West Texas Intermediate (WTI) crude CLc1 surged by seven cents, or 0.1 percent, to settle at $53.02.

At present, crude oil is still trading at its highest since mid-2015 which is majorly supported by an agreement by the Organization of the Petroleum Exporting Countries (OPEC) and non-members to reduce output by almost 1.8 million barrels per day stated to be implemented from Jan 1.

"This week's trade has offered no significant surprises as price consolidation continues with the market adopting a wait and see attitude regarding OPEC's execution of planned production curtailments," as mentioned by Chicago-based energy advisory firm, Ritterbusch & Associates.

Meanwhile, prime OPEC producers including Saudi Arabia and Iraq have confirmed that the production would be deducted in accordance with the OPEC deal. However, Libya and Nigeria are excluded as the conflict has already pushed them to reduce output. 

As per reports, Libya's National Oil Corp is hoping to add 270,000 bpd to its overall production over the next three months; the country has announced the reopening of pipelines leading from its two major fields, El Feel and Sharara.

On Friday, the dollar index steadied not far below a 14-year peak of 103.65 which was reached earlier this week.

A firmer value of the dollar makes dollar-denominated commodities such as oil more expensive for other currency holders.

Consultancy Poten & Partners commented on Thursday that the reserve could be mellowed down by some 190 million barrels during 2017 and 2025 if the planned sales move smoothly.