WTI, Brent Crude Settle Lower on Friday, Post Best Annual Increases Since 2009

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Despite losing ground on Friday, crude oil futures had their best annual rise since 2009, according to Bloomberg MarketWatch.

On the New York Mercantile Exchange, February West Texas Intermediate crude oil fell 5 cents, or 0.1%, to settle at $53.72 a barrel. Overall, WTI futures experienced a calendar year jump of nearly 45%. For December, the domestic benchmark futures contract rose more than 8%, fueled in part by expectations that OPEC and other major producers will abide by an agreement to reduce output.

On the London ICE Futures Exchange, March Brent crude, the global benchmark, dropped 22 cents, or 0.4%, to end trading at $56.63 a barrel. Overall, Brent crude saw an annual rise of 52%, marking its best annual jump since 2009.

Global oil markets will be closed Monday for the holiday.

Earlier on Thursday, the Energy Information Administration reported that domestic crude oil inventories grew by 614,000 barrels for the week ending December 23. This pales in comparison with the 4.2-million barrels increase reflected by the American Petroleum Institute but remains above the 1.2-million barrel contract forecast by analysts surveyed by The Wall Street Journal.

“The main driver behind last week’s build was a slowdown in refinery activity,” said S&P Global Platts, noting that the refinery utilization rate fell 0.5% to 91% of total capacity. This is the time of the year when crude stocks usually fall, as refiners increase production.

Oil production also fell by 20,000 barrels from a week earlier, to 8.76 million barrels, roughly 4.4% lower than same period last year.

Analysts say the current downtrend in domestic oil production may reverse as oil prices rise, frustrating OPEC’s latest effort to lift prices by cutting the group’s overall output as drillers return to work.

On the New York Mercantile Exchange, February natural gas declined by 7.8 cents, or 2.1%, to settle at $3.724 per million British thermal units. Overall, natural gas’s 59.4% annual rise was the strongest in 11 years. Natural gas has jumped nearly 12% in December, aided in part by forecasts for colder-than-normal weather in parts of the nation.