Oil held gains of more than $58 per barrel as the Christmas holiday ended and trading once again resumed. Add to this that for the second week the U.S. explorers paused in their rig expansions.
There was little change in New York after its 2 percent gain last week. Baker Hughes data on Friday showed that the number of U.S. rigs targeting oil stayed at 747.
Operator Ineos Group said on Monday that the North Sea’s Forties Pipeline System has been completed. It then added that the pressure testing has begun. The halt of the line caused prices to surge earlier this month.
West Texas Intermediate (WTI) was at $58.54 per barrel on the New York Mercantile Exchange for its February delivery. It rose 7 cents at 2:23 P.M. GMT.
The total traded volume was at 53 percent below the 100-day average. The Friday contract resulted in $58.47, adding 11 cents or 0.2 percent.
Brent’s February settlement was at $65.27 per barrel, adding 2 cents, on the London-based ICE Futures Europe exchange. Prices rose to $65.25 on Friday, adding 35 cents or 0.5 percent. The global benchmark crude traded at a premium of $6.73 to WTI.
Hedge funds had lower bets on the Brent crude following a rise to a record the week before. The net-bullish position on the WTI dropped for a third straight week after hitting a nine-month high a month earlier.
“It seems like now most people have got their positions and are waiting to see what 2018 brings,” said managing director Rob Thummel.
OPEC on U.S. Rigs
A second yearly advance is expected as the Organization of Petroleum Exporting Countries, along with its allies which includes Russia, extends supply curbs until the end of 2018.
Jabbar Al-Luaibi, Iraq’s Oil Minister said on Monday that he is expecting that the prices will climb next year. He cited the global stockpiles dropping as demand rises in China and India as the cause.
“It’s a bit too early to say whether U.S. rigs will continue to decline as we can’t ignore the fact that it’s winter and some seasonal factors could be stalling drilling activity,” said commodities analyst Will Yun over the phone. “The shutdown of the Forties pipeline has kept prices higher and it will support oil’s bull run until at least the end of this year.”
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