Oil prices hover near multi-year highs

LONDON, January 15, 2018 – Crude oil prices were mixed on Monday, but they were still hovering near multi-year highs as overall optimism regarding the rebalancing of the market continued to support the commodity.

There will be no floor trading on the Nymex on Monday because of the Martin Luther King Day holiday in the U.S. All electronic transactions will be booked with Tuesday’s trades for settlement.

The U.S. West Texas Intermediate crude February contract was up 11 cents or about 0.17% at $64.41 a barrel by 09:45 a.m. ET (13:45 GMT), close to last Thursday’ three-year peak of $64.77.

Elsewhere, Brent oil for March delivery on the ICE Futures Exchange in London eased 5 cents or about 0.09% to $69.83 a barrel, not far from a three-year higher of $70.05 also hit last Thursday.

 

Oil prices dipped earlier, after data from General Electric (NYSE:GE)’s Baker Hughes energy services unit showed that the number of oil drilling rigs climbed by 10 to 752 in the week to Jan. 5, the first increase to drilling numbers in five weeks.

But the commodity remained supported amid ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies.

Futures have added around 13% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.

The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.

However, analysts and traders have warned that the recent rally could encourage U.S. shale oil producers to ramp up production as they look to take advantage of higher prices.

Elsewhere, gasoline futures inched up 0.04% to $1.849 a gallon, while natural gas futures lost 2.41% to $3.123 per million British thermal units.

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