Market Insights

December 20, 2016 • Posted in Market Insights

Week of December 19, 2016

  • Oil fell last week on doubts that OPEC would achieve planned production cuts but managed to finish closer to last week’s levels
  • OPEC solidarity isn’t guaranteed and evidence of the output cuts won’t be visible until mid-January at the earliest, so the market may remain skittish
  • Meanwhile, Baker Hughes reported that the US active rig count was up another 12 rigs to 510 last week, the highest level since January
  • Increased U.S. production should partially offset OPEC production cuts and keep US WTI selling at a discount to Brent
  • The U.S. dollar strengthened due to the Fed’s 0.25% rate hike which put further downward pressure on oil prices
  • Natural gas fell to $3.44 per MMBtu NYMEX but is likely to reverse due to extremely cold weather on the way

WTI Crude Oil & Brent Crude Oil 12202016

 

 

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