West Texas Intermediate for September delivery was at $46.99 a barrel on the New York Mercantile Exchange, up 20 cents, at 11:38 a.m. London time. The contract rose 21 cents to close at $46.79 on Wednesday for a fifth day of gains, the longest run since April 2015. Total volume traded Thursday was 4 percent above the 100-day average. Brent for October settlement rose as much as 20 cents to $50.05 a barrel on the London-based ICE Futures Europe exchange, before slipping to trade little changed. The contract closed at $49.85 on Wednesday, 19 percent higher than its August low and near the 20 percent threshold for a bull market. The global benchmark crude traded at a $2.11 premium to WTI for October delivery. U.S. crude stockpiles dropped by 2.5 million barrels last week to 521.1 million barrels, the EIA reported Wednesday.
Oil’s revival from the biggest crash in a generation persisted, with prices set for a second annual gain after a year marked by hurricanes, Middle East conflict and the tussle between OPEC and U.S. shale.
Futures are up more than 11 percent in 2017, having entered a bull market in September. The year’s gains were driven by output cuts by the Organization of Petroleum Exporting Countries and Russia, along with geopolitical tensions in the Middle East and pipeline disruptions from the North Sea to Canada and Libya. In 2018, investors will watch whether the price recovery triggers a new flood of U.S. output.
“The current highs are unsustainable in the short-to-medium term, with prices likely to head back below $60 once we get past January, but for now the season of goodwill appears to be in full swing,” said analysts led by Michael dei-Michei at consultants JBC Energy GmbH in Vienna.
Speculation is rising that American drillers will put more rigs to work as oil strengthens, with shale growth driving forecasts of record U.S. supply in 2018. That could undermine plans by producers including Saudi Arabia, who have pledged to extend production curbs through the end of 2018 to wipe out a global glut. After Hurricane Harvey shut Gulf Coast refiners at the end of August and hurt prices, violence in Iraq and a pipe crack in the U.K. have helped buoy crude.
more at: https://www.bloomberg.com/news/articles/2017-12-29/oil-resurrection-sets-stage-for-another-opec-shale-clash-in-2018