U.S. crude ends year above $60 on strong global oil demand

Randal Sanchez
December 30, 2017

It also was reported that oil reserves in the US decreased last week by 4.61 million barrels to 431.88 million barrels, while analysts forecast a decrease of 4.0 million barrels. Brent, the global benchmark, gained 71 cents, or 1.1%, to $66.87 a barrel.

"The current highs are unsustainable in the short-to-medium term, with prices likely to head back below $60 once we get past January, but for now the season of goodwill appears to be in full swing", said analysts led by Michael dei-Michei at consultants JBC Energy GmbH in Vienna.

WTI prices were supported by data from the U.S. Energy Information Administration late on Thursday showing domestic oil production C-OUT-T-EIA declined last week to 9.75 million barrels per day (bpd) from 9.79 million bpd the previous week. That could undermine plans by the Organization of Petroleum Exporting Countries and and other producers, including Russian Federation, who have pledged to extend production curbs through the end of 2018 to wipe out a global glut.

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For now, shale drillers are showing restraint, with the number of working rigs unchanged for the second week in a row, according to Baker Hughes data released on Friday. Propane has many non-transportation sector end uses, including as a fuel for heaters and cookstoves and as a feedstock for petrochemical industry.

OPEC and its partners made a decision to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry. Rig count data from Baker Hughes (BHGE) on Friday reported a small drop in rig counts for the week, with rigs drilling for gas in the US down by two to 182, while those drilling for oil remained unchanged at 747.

The last week of the year saw futures trading above US$60 a barrel in NY and US$67 in London for the first time since mid-2015, after the two most important oil benchmarks surged more than 40 per cent from their doldrums in June. A survey by the Wall Street Journal showed expectations for a decline of 3.7 million barrels for the week. "We haven't actually had a month for WTI where it averaged in the 60s since September of 2009", he said, adding that there were many months following that year in which crude oil averaged anywhere between $80 and $100 per barrel, but not typically in the $60 range. It ranks first in oil futures trade. Supportive equities, with DOW hitting another record high also kept oil elevated. "That's one of the key risks to our business".

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