Oil prices settled slightly
lower on Friday, the year's last trading day, but attained their biggest annual
gain since 2009, after OPEC and partners agreed to cut output to reduce a
supply overhang that has depressed prices for two years.
A two-rig rise in the oil
rig count in the United States, the ninth weekly increase in a row, as reported
by oilfield services provider Baker Hughes Inc, added to bearish sentiments. But
the total count of 525 for the week, the last for the year, was still below
last year's level by 11 rigs. U.S. benchmark West Texas Intermediate (WTI)
crude futures were down 5 cents, or 0.1 percent, at $53.72 a barrel, while
Brent fell 3 cents, or 0.1 percent, to $56.82.
"Some profit-taking ...
very light trading - a lot of people have already done what they needed to do
for the year." said Elaine Levin,
president of Powerhouse, an energy-specialized commodities broker in
Washington. Brent rose 52 percent this year and WTI climbed around 45 percent,
the largest annual gains since 2009, when the benchmarks rose 78 percent and 71
percent respectively.
Oil prices have slumped
since the summer of 2014 from above $100 a barrel. The price rout, due to an
oversupply thanks in part to the U.S. shale oil revolution, was accentuated
later that year when Saudi Arabia rejected any deal by the Organization of the
Petroleum Exporting Countries (OPEC) to cut output and instead fought for
market share.
But a historic OPEC agreement
struck over three months from September that will reduce production from Jan.
1, marked a return to the 13-country group's old objective of defending prices.
Oman told some customers it
will reduce term allocations by 5 percent in March, but did not say whether the
supply reduction would continue after that. The rise in prices can be seen as
"proof of international credibility," for OPEC and partners, said Igor Yusufov, founder of the Fund
Energy investment firm and a former Russian energy minister. He said the rise,
a "ponderable New Yew present" for producers, is propelled by
expectations of oil demand growth.
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