Crude oil futures climbed to a three-week high on Monday, as OPEC members continued to work out a production freeze and expectations that the Trump presidency will bring relaxed regulation, according to Bloomberg MarketWatch.
December West Texas Intermediate crude added $1.80, or 3.9%, to settle at $47.49 a barrel on the New York Mercantile Exchange on the contract’s expiration day, marking the highest settlement for a front month contract since October 28.
January WTI crude, the new front month contract, added $1.88, or 4.1%, to end trading at $48.24 a barrel.
On London’s ICE Futures Exchange, January Brent crude, the global benchmark, rose $2.04, or 4.4%, to settle at $48.90 a barrel.
Crude oil prices have retreated sharply from the benchmark of $50 a barrel in October. Meanwhile, OPEC members have not given up on cutting production to between 32.5 million and 33 million barrels a day, down from record levels of 33.83 million barrels a day of output in October.
Differences within the cartel and OPEC’s repeated failure to deliver on production cuts for the past two years have contributed to low prices.
The market is still in a period of adjustment as a Donald Trump presidency is expected to loosen regulations, resulting in higher output of domestic oil and gas.
“U.S. elections have further muddled the decision-making process as Donald Trump has made strong statements about Iranian sanctions and banning imports of Saudi crude,” analysts at Barclays wrote in a note to clients.
Meanwhile, energy futures posted a strong rally on the New York Mercantile Exchange, with December natural gas rising 10.7 cents, or 3.8%, to settle at $2.95 per million British thermal units.