Market Insights

January 4, 2017 • Posted in Market Insights

Week of January 2, 2017

  • WTI closed at $53.72 on Friday, up $0.70/bbl but up 45% for the year, the highest annual jump since 2009, while Brent finished at $56.13, up $0.97/bbl
  • The market appears to feel that OPEC will be successful enough in reducing production to put a floor under current prices
  • The Wall Street Journal reports that in 17 production cuts since 1982 OPEC reduced production by only 60% of the amount that was planned
  • A Wall Street Journal survey of 14 investment banks predicts that Brent will average $54/bbl in 2017, indicating that we may have reached the new band in which oil will trade in 2017
  • The US active oil rig count continues to grow, and Oilprice.com reports banks are now open to expanding credit to US drillers again given the outlook for oil
  • Natural gas rose to $3.80 per MMBtu NYMEX last Thursday on growing demand
  • Competition from coal in power generation may limit upside movement

WTI Crude Oil & Brent Crude Oil 010417

 

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