Oil prices rise in Christmas eve trade amid supply cuts

Sunday, 29 Dec, 2019

Oil prices have been mostly bolstered by more optimistic expectations for the global economy and Sino-American trade developments.

US energy firms idled eight working oil rigs, the first reduction in three weeks, as producers followed through on plans to slash spending, energy services firm Baker Hughes Co said in its closely followed report on Friday.

In other energy trade, February gasoline futures RBF20, -0.35% were trading flat at $1.708 a gallon, after posting a 2.6% weekly advance on Friday, while February heating oil HOF20, -0.03% ticked up 0.2% to $2.026 a gallon, after booking a weekly climb of 1.7%.

Brent crude was up 28 cents, or 0.4%, at $67.48 a barrel by 0651 GMT.

He remarked, "Oil will likely correlate to equities" through the remainder of the year and even see multi-month highs, "but the situation is not sustainable for much longer: the market is overbought".

A report released by the American Petroleum Institute on Tuesday evening showed USA crude stockpiles declined by 7.9 million barrels last week.

The West Texas Intermediate for February delivery settled 57 cents higher at 61.68 US dollars a barrel on the New York Mercantile Exchange.

Futures rose as much as 0.7% in NY, extending gains as trading resumed after the Christmas break.

"Oil prices continue to show an end-of-year strength backed by a combination of definitive progress in the trade agreement between the United States and China, the December OPEC / OPEC + agreement and the slowdown in shale activity", Stephen said. The so-called Opec+ group agreed this month to extend and deepen production cuts that would take as much as 2.1 million barrels per day of supply off the market as on January 1, or roughly 2 per cent of global demand. Innes, chief market strategist for Asia at AxiTrader.

Brent for February settlement rose 59 cents to $67.79 a barrel. "We think there is a good chance that oil prices will be higher in several years as non-OPEC production growth slows materially into the next decade".

A decline in crude oil supply after 2020 could lead to higher prices, the Russian Energy Ministry said in a draft energy strategy document. The contract added 8 cents to close at $60.52 on Monday. The EIA report is due at 11:00 a.m. on Friday.

The market also rose as President Trump said Tuesday he and Chinese President Xi Jinping will have a signing ceremony to sign the first phase of the U.S.