Crude oil futures continued to rally on Tuesday as favorable forecasts extended gains and drove prices to a three-year high, according to Bloomberg MarketWatch.
February West Texas Intermediate crude jumped $1.23, or 2%, to settle at $62.96 a barrel on the New York Mercantile Exchange, marking its highest finish since December of 2014.
March Brent crude, the global benchmark, climbed $1.04, or 1.5%, to end trading at $68.82 a barrel on the ICE Futures Europe Exchange, also marking its highest finish since December of 2014.
On Tuesday, the Energy Information Administration released its monthly report raising its 2018 price forecasts on West Texas Intermediate crude to $55.33 a barrel and Brent crude to $59.74 a barrel.
It also lifted its 2018 domestic crude output forecast to 10.27 million barrels a day, up 2.6% from the December prediction. For 2019, the EIA forecasts an average output of 10.85 million barrels a day. Both would be record annual output levels according to the report.
The American Petroleum Institute will release figures on domestic petroleum supplies late Tuesday, followed by Wednesday’s EIA figures. Analysts surveyed by S&P Global Platts predict that the EIA will report a fall of 3.5 million barrels in last week’s crude stockpiles.
Meanwhile, February natural gas added 3.1% to settle at $2.923 per million British thermal units, but still trades about 3 cents lower month to date.
“While cooler temperatures and a ‘bomb cyclone’ had spiked northeastern prices in recent days, the effect on longer-dated Henry Hub prices was already limited, with the weather outlook now turning back in favor of the bears,” said Robbie Fraser, commodity analyst at Schneider Electric.
The EIA’s monthly report cut the forecast for natural gas prices by 7.6% to $2.88 per million Btus, amid expectations for a record year-over-year rise in dry U.S. natural gas production in 2018.