Crude Oil Futures Rise on Thursday as IEA Data Confirms OPEC Output Decline

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On the eve of the U.S. presidential inauguration, crude oil futures rose Thursday after a report from the International Energy Agency confirmed a decline in output by OPEC members, according to Bloomberg MarketWatch.

On the New York Mercantile Exchange, February West Texas Intermediate crude rose by 29 cents, or 0.6%, to settle at $51.37 a barrel. The contract expires at the settlement on Friday. The more active March WTI contract which will become the front-month contract, settle at $52.12 a barrel, up 23 cents, or 0.4%.

March Brent crude, the global benchmark, rose 24 cents, or 0.5%, to end trading at $54.16 a barrel on the London ICE Futures Exchange.

The U.S. Energy Information Administration reported a rise in domestic crude oil supplies of 2.3 million barrels for the week ending January 13. The American Petroleum Institute reported a drop of 5 million barrels late Wednesday, while analysts polled by S&P Global Platts forecast a decline of 900,000 barrels.

Domestic crude production for last week was little changed, down 2,000 barrels a day at 8.944 million barrels a day, the EIA said.

Meanwhile, a monthly report from OPEC on Wednesday showed that production by the 13-member bloc contracted by 221,000 barrels a day in December from the previous month. Overall, the cartel produced almost 33.1 million barrels a day in December.

The production deal went into effect this month, which means the January production data will be a more indicative gauge of compliance. That data will be released in mid-February. An OPEC oversight committee will convene later this week to review progress so far.

Rising domestic production could offset the OPEC agreement. Based on the EIA’s projection, shale oil output in the U.S. will increase to 4.75 million barrels a day in February, a 4.6% jump from January.

Meanwhile, natural gas futures settled higher after the EIA reported Thursday that supplies fell by 243 billion cubic feet for the week ending January 13. That was close to the decline of 238 billion cubic feet expected by analysts polled by S&P Global Platts.

February natural gas rose 6.6 cents, or 2%, to end trading at $3.368 per million British thermal units on the New York Mercantile Exchange.

 

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