Oil futures turned mixed after hitting a three-month high Monday, buoyed by upbeat expectations around the global economy as traders also kept an eye on developments in Iraq.
West Texas Intermediate crude for February delivery CLG20, -0.21% on the New York Mercantile Exchange was up 1 cent at $61.73 a barrel, while March Brent crude BRNG20, +0.44%, the most-active contract, was down 14 cents, or 0.2%, at $66.73 a barrel. Monday marks the expiration day of the February Brent contract CLG20, -0.21%, which was up 31 cents, or 0.5%, at $68.47 a barrel.
Both grades traded at their highest levels for most-active futures contracts since mid-September, when a drone attack on Saudi oil facilities caused crude prices to spike.
WTI crude, the U.S. benchmark, and Brent, the global benchmark, are up around 11.8% and 10.4% this month, respectively. That puts WTI on track for a 36% gain so far this year, while Brent is up around 24%.
“Both the Brent and WTI oil markets have rallied nearly 20% over the past couple of months of trading to three-month highs just below $69.00 and just above $62.00 in Brent crude and WTI oil, respectively, as easing fears of slowing global oil and fuel demand growth underpinned by a U.S.-China trade agreement, increased OPEC plus output cuts, and fears of Middle East supply disruption propelled the markets to levels not seen since the middle of September,” wrote analysts at TFS Energy, in a note. “However, expectations of increased non-OPEC production growth in the coming year will likely provide resistance to rising oil prices in the coming months.”
Gains in December came after the U.S. and China announced an agreement on a “phase one” trade deal that helped soothe worries over the global economic outlook and was credited with sparking a rally in equities and other assets perceived as risky.
The Organization of the Petroleum Exporting Countries and its allies earlier this month agreed to cut output by 500,000 barrels a day on top of its current reduction agreement, beginning in January.
Analysts said investors are also keeping an eye on developments in Iraq after news reports said protesters on Saturday forced the temporary closure of the country’s Nasiriyah oil field.
Also, U.S. military forces conducted “precision defensive strikes” against five sites controlled by Kataeb Hezbollah, or Hezbollah Brigades, an Iran-backed Iraqi militia, a Defense Department spokesman said Sunday. The U.S. has blamed the militia for a rocket barrage on Friday that killed a U.S. defense contractor at a military compound near Kirkuk, in northern Iraq.
In other energy trading, February gasoline RBG20, -1.19% fell 0.9% to $1.7284 a gallon, while February heating oil HOG20, -0.45% shed 0.3% to $2.046 a gallon.
February natural-gas futures NGG20, -1.17% were off 1.3% at $2.203 per million British thermal units.
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December 30, 2019 at 08:56PM
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Oil mixed after hitting 3-month high as traders keep eye on Iraq - MarketWatch
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