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Crude Oil Futures - Weekly Outlook: December 19 - 23

Published 18/12/2016, 09:15 pm
© Reuters.  Oil posts weekly gain on signs producers will comply with output cuts
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Investing.com - Oil futures finished higher on Friday, turning positive for the week amid indications that major crude producers are adhering to their promise to pull back on output.

On the ICE Futures Exchange in London, Brent oil for February delivery jumped $1.19, or 2.2%, to settle at $55.21 a barrel by close of trade Friday, not far from a 17-month high of $57.89 touched earlier in the week.

London-traded Brent futures logged a gain of 88 cents, or 1.6%, on the week.

Elsewhere, on the New York Mercantile Exchange, crude oil for delivery in February tacked on 98 cents, or 1.9%, to end the week at $52.95 a barrel, within sight of a one-and-a-half-year peak of $54.51 logged on December 12.

For the week, New York-traded oil futures rose 40 cents, or 0.8%.

Russian Energy Minister Alexander Novak said on Friday that all Russian oil companies have agreed to cut crude output under Moscow's agreements with members of the Organization of the Petroleum Exporting Countries.

In addition, Kuwait reportedly notified customers that it would cut supplies from January as part of an effort by OPEC to stabilize the oil market.

OPEC members have agreed to reduce output by a combined 1.2 million barrels per day starting from January 1, their first such deal since 2008.

However, there are some worries in the market about production increases in the U.S. and Libya.

Oilfield services provider Baker Hughes said late Friday that the number of rigs drilling for oil in the U.S. last week rose by 12 to 510, a level not seen in almost a year.

Meanwhile, Libya, which is allowed to ramp up production as part of the OPEC deal, restarted operations at two key oilfields. Libyan officials said the restarting of the oilfields and a connected pipeline could bring back more than 200,000 barrels a day of oil within days.

In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.

Oil traders will also continue to pay close attention to comments from global oil producers for further evidence that producers will stick to their agreement to cut production next year.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Tuesday, December 20

The American Petroleum Institute, an industry group, is to publish its weekly report on U.S. oil supplies.

Wednesday, December 21

The U.S. Energy Information Administration is to release weekly data on oil and gasoline stockpiles.

Friday, December 23

Baker Hughes will release weekly data on the U.S. oil rig count.

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