Contributing to a fourth consecutive increase, crude oil futures rose on Wednesday as traders remained optimistic while awaiting weekly data on inventories, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February tacked on 16 cents a barrel, or 0.3%, to finish at $54.06 a barrel—their highest close since July 2, 2015.
On the London ICE Futures Exchange, February Brent crude climbed 13 cents, or 0.2%, to settle at $56.22 a barrel—the highest finish since July 22, 2015.
“Remember it was a year ago almost to the day when Saudi Arabia said they would continue to flood the market with oil. Now we have the first OPEC and non-OPEC cut since 2001. Energy has made an incredible comeback and the new year looks bullish and bright,” said Phil Flynn, senior market analyst at Price Futures Group.
While traders are optimistic for the most part that nations will abide by the OPEC production curb, there is still a degree of skepticism about how closely and for how long producers will comply with individual quotas.
“We may see some reduction in output as production is ramped down toward the lower targets, although others could also be take the opportunity to push a few more barrels into the market at the most attractive price,” said Tim Evans, a Citi Futures analyst.
Analysts surveyed by S&P Global Platts expect a drawdown of 1.5 million barrels a day in domestic crude inventories for the week ending December 23.
The Energy Information Administration will release weekly data on U.S. crude inventories on Thursday, one day later than usual due to the Christmas holiday. Traders will eye inventory data from the American Petroleum Institute, an industry trade group, after Wednesday’s close.
On the New York Mercantile Exchange, natural gas for February delivery rose 3.4% to settle at $3.93 per million British thermal units.