Crude closed at a 17-month high in New York as investors weighed OPEC production cuts against signs of greater exports from Libya and a U.S. stockpile glut.
Futures were little changed, capping a 2.2 percent gain this week. Libya’s biggest oil terminal loaded its first cargo in about two years, after reopening two of its biggest oil fields following years of conflict. U.S. stockpiles expanded by 2.26 million barrels last week, keeping inventories at the highest seasonal level in more than three decades, according to government data on Wednesday.
Oil has rallied since the Organization of Petroleum Exporting Countries agreed last month to curb production for the first time in eight years. The deal was bolstered by a pledge from 11 non-OPEC nations including Russia and Mexico to also trim supply. Iraq is fully committed to the OPEC accord, Oil Minister Jabbar al-Luaibi said Thursday in Cairo at a meeting of the Organization of Arab Petroleum Exporting Countries, known as OAPEC.
“There’s some pre-holiday consolidation going on,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by telephone. “We’re going to be paying attention to headlines, especially those that indicate compliance with the OPEC production cuts and those about the recent rise in Libyan oil output.”
West Texas Intermediate for February delivery rose 7 cents to settle at $53.02 a barrel on the New York Mercantile Exchange. It was the highest close since July 14, 2015. Total volume traded was about 64 percent below the 100-day average at 2:54 p.m.
Brent for February settlement rose 11 cents to $55.16 a barrel on the London-based ICE Futures Europe exchange. Prices are down 0.1 percent for the week. The global benchmark crude closed at a $2.14 premium to WTI.
Libyan Rebound
Libya pumped just under 600,000 barrels a day last month, Bloomberg estimates show. That’s less than half of the 1.6 million before the 2011 uprising that halted production and closed ports. It’s targeting output of 900,000 barrels a day by the start of 2017 and about 1.2 million barrels by the end of next year, according to National Oil Corp. Chairman Mustafa Sanalla.
“The Libyan loading puts some weight on the market,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York, in a telephone interview. “It was probably seen as a good time to get rid of some length before the three-day weekend.”
See also: U.S. urges early delivery of crude from reserves in February
U.S. crude stockpiles expanded to 485.4 million barrels last week, the highest seasonal level since the Energy Information Administration began compiling weekly data in 1982. The drill rig count has climbed the past seven weeks to the highest level since January, according to data from Baker Hughes Inc.
“There’s so many wildcards around both the supply and demand side that you have to be cautious,” Christian Schulz, director of European research at Citigroup Global Markets Ltd., said in a Bloomberg television interview. Prices will “generally rise as demand and supply globally come a bit more into balance.”
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