Oil Little Changed as 2018 Fears Outweigh Static US Rig Count
(Bloomberg) -- Oil futures were little changed as traders concerned about 2018 production growth shrugged off reports of a static rig count and falling U.S. stockpiles.
Front-month futures rose 0.2 percent in New York, with a weekly gain of 2 percent. Prices jumped the last two days after U.S. data on Wednesday showed crude stockpiles tumbling. On Friday, the rig count remained at 747, but traders seemed unconvinced that U.S. production won’t continue to rise next year, undermining OPEC’s deal to bring the market into balance.
Traders are swayed by a combination of that uncertainty and some year-end profit-taking with prices up about 8 percent for the year, according to John Kilduff, founding partner at Again Capital LLC in New York.
"It’s not a great bullish setup for January," Kilduff said in a telephone interview. Growing U.S. production has been "aggravating" for OPEC and its allies, he said, and the year has seen "a pretty good run, so now we’re also seeing some profit-taking.”
ICE Futures Europe exchange data released Friday showed hedge funds have cut net bullish bets on Brent crude from record levels. Worldwide inventories won’t fall enough to be near the level targeted by OPEC when the group meets in June, Saudi Arabia’s Energy Minister Khalid Al-Falih said this week, signaling the kingdom may keep production restrained to the end of the year.
West Texas Intermediate for February delivery settled at $58.47 a barrel on the New York Mercantile Exchange, up 11 cents.
See also: World’s Most Important Oil Benchmark Feels Strain of Pipe Crack
Brent for February settlement rose 35 cents to close at $65.25 a barrel on the London-based ICE Futures Europe exchange. The global benchmark traded at a premium of $6.78 to WTI.
The North Sea’s Forties Pipeline System, which carries crude used to price the benchmark Dated Brent, is set to return to normal flows early next year, according to a statement from operator Ineos Group. It expects to complete repairs to a hairline crack on the link by “around Christmas.”
China is on the verge of opening a domestic market to trade oil futures contracts. The ramifications run deep as foreign investors are set to be allowed to trade -- a first for China’s commodities markets. U.S. crude output expanded at the smallest rate since starting a nine-week gain in mid-October.
With assistance from Ben Sharples and Grant Smith. To contact the reporter on this story: Meenal Vamburkar in New York at email@example.com. To contact the editors responsible for this story: James Herron at firstname.lastname@example.org Reg Gale, Carlos Caminada.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.