Crude oil prices were largely unchanged near recent highs in early dealings on Monday, as the market weighed rising U.S. drilling activity against ongoing efforts by major producers to cut output to reduce a global glut.
U.S. West Texas Intermediate (WTI) crude oil prices tacked on 8 cents to $64.38 a barrel by 3:35AM ET (0835GMT). It rose to its highest since Dec. 2014 at $64.77 last Thursday.
There will be no floor trading on the Nymex on Monday because of the Martin Luther King Day holiday in the U.S. All electronic transactions will be booked with Tuesday’s trades for settlement.
Meanwhile, Brent crude futures, the benchmark for crude oil prices outside the U.S., were at $69.79 a barrel, down 8 cents from their last close. The contract broke above $70 last Thursday for the first time since Dec. 2014.
Crude oil prices notched the fourth week of gains in a row last week amid ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies.
Crude oil prices have added around 13% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
However, analysts and traders have warned that the recent rally could encourage U.S. shale oil producers to ramp up production as they look to take advantage of higher prices.
The number of oil drilling rigs climbed by 10 to 752 in the week to Jan. 5, data from General Electric (NYSE:GE)’s Baker Hughes energy services unit showed, the first increase to drilling numbers in five weeks.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Wednesday and Thursday to further weigh what the impact of recent storm activity was on supply and demand.
The reports come out one day later than usual due to the Martin Luther King Day holiday on Monday.
Oil traders will also focus on monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels.
The data will give traders a better picture of whether a global rebalancing is taking place in the oil market.
In other energy trading, gasoline futures held steady at $1.847 a gallon, while heating oil was little changed at $2.084 a gallon.
Natural gas futures declined 4.6 cents, or 1.5%, to $3.154 per million British thermal units. It soared nearly 15% last week, after data showed the largest withdrawal on record in U.S. supplies in storage.
Related: Understanding Crude Oil Classifications and how it affects crude oil prices.
Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.