Crude Oil Prices Jump Above $50 a Barrel on Monday

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Crude oil futures settled at their highest points since July 2015 on Monday as the energy industry continued to grasp the details of OPEC’s agreement to curb production, according to Bloomberg MarketWatch.

On the New York Mercantile Exchange, January West Texas Intermediate crude rose 11 cents, or 0.2%, to settle at $51.79 a barrel, marking the highest finish for oil since July 2015.

On the London ICE Futures Exchange, February Brent crude, the global benchmark, climbed 48 cents, or 0.9%, to end trading at $54.94 a barrel.

The OPEC agreement to restrict production will begin January 1, with the cartel meeting again in May to reassess the agreement and decide whether an extension is needed. A meeting of non-OPEC oil producers is set for December 10 in Vienna.

“The market is digesting a couple of surveys that came out [Monday] showing November production increases of about 300,000 a day…and brings in some skepticism that members will be cutting production come Jan. 1 and whether there will be” some breaches of the pact in 2017, said Andy Lipow, president at oil consulting firm Lipow Oil Associates. Indeed, Russia raised its production to a record 11.2 million barrels a day in November.

Many analysts expect greater volatility in the next year as prices seek a new floor. Citigroup said in the oil market, “we expect price swings of as much as $20 to $25 a barrel to become part of the new norm.”

Meanwhile, January natural gas jumped 21.8 cents, or 6.3%, to finish at $3.654 per million British thermal units on the New York Mercantile Exchange.

 

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