Crude oil futures finished higher on Friday as all signs point to favorable compliance with OPEC’s global production curb, according to Bloomberg MarketWatch.
On the New York Mercantile Exchange, February West Texas Intermediate crude tacked on 23 cents, or 0.4%, to settle at $53.99 a barrel. For the week, the WTI index rose by nearly 0.5% after posting gains in each of the previous three weeks.
On the London ICE Futures Exchange, March Brent crude, the global benchmark, rose by 21 cents, or 0.4%, to finish at $57.10 a barrel. For the week, Brent crude saw a gain of about 0.5%.
OPEC members appear “to be off to a good start for compliance, based on indications from Kuwait,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management.
OPEC has pledged to reduce production by 1.2 million barrels a day while other major producers promised a cutback of nearly 600,000 barrels a day.
Kuwait is making larger production cuts than required by the deal, according to a Bloomberg report on Friday. Saudi Arabia has curbed production by nearly half a million barrels per day since October, according to The Wall Street Journal.
OPEC plans to release its monthly oil report on January 18. The International Energy Agency’s monthly report is due the following day. Both reports will provide crucial updated information on the status of OPEC production cuts.
Meanwhile, OPEC members Libya and Nigeria opted out of the production curb. Both countries have been ramping up crude output.
“With output in Libya and Nigeria probably rising this month to some 700,000 barrels a day and 1.7 million barrels a day, respectively, we estimate that actual total OPEC output in January could be closer to 33.5 million barrels a day than to the official ceiling of 32.5 million barrels a day,” said consultancy FGE in a note.
On the New York Mercantile Exchange, February natural gas rose 1.2 cents, or 0.4%, to settle at $3.285 per million British thermal units. For the week, natural gas futures fell by 11.8% as warmer weather forecasts dulled the outlook for demand.
