Oil prices edged up for the week ending Dec. 20, with the price of West Texas Intermediate (WTI) up slightly and Brent crude oil for February delivery up 1.41 percent.
WTI January delivery, which expired Thursday, increased 1.01 U.S. dollars as of Thursday, but WTI February delivery erased almost an entire week of advance on Friday.
WTI February delivery closed the week at 60.44 dollars a barrel on the New York Mercantile Exchange, while Brent crude finished the week at 66.14 dollars a barrel on the London ICE Futures Exchange, both hitting three-month high.
Oil prices surged in September after drone attacks hit Saudi Arabia's key oil facilities and forced the country to cut its crude oil output by half. On Sept. 16, WTI settled at 62.9 dollars a barrel, while Brent crude closed at 69.02 dollars a barrel.
WTI and Brent crude prices have increased 33.10 percent and 22.94 percent, respectively, so far this year, falling from their peak levels in April when the growth of WTI hit over 40 percent, and Brent crude over 30 percent.
From Monday to Thursday, oil prices extended gains in the previous weeks, as optimism about the economy raised hopes of improved outlook for crude demand.
Oil prices were little changed on Wednesday after data showed a smaller-than-anticipated decline in U.S. crude stocks. U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 1.085 million barrels from the previous week, less than the market expected draw of 1.288 million barrels, implying weaker demand and bearish for crude prices.
Oil prices fell on Friday after data showed a big weekly climb in the number of active U.S. drilling rigs. The number of active drilling rigs in the United States increased by 14 to 813 for the week ending Dec. 20.
Oil prices have kept gaining momentum since the start of the year due to some geopolitical concerns and the OPEC's decision of production cut. But the momentum has slowed down, mainly because of the concerns over downturn in demand for crude oil.
However, oil prices have been on track for stronger performance recently amid increasing prospects for a trade truce between the United States and China, as well as an agreement between OPEC and its allied producers for further supply cuts.
Meanwhile, a rising U.S. dollar in the past months has dragged down the greenback-denominated crude futures as the U.S. Dollar Index has been keeping uptrend since mid-2018. The dollar index finished the week higher, but it stopped the early-week recovery.
During the week, WTI briefly touched the level of 61 dollars a barrel and analysts believed the next key threshold will be at the 60-dollar level. In the meantime, Brent crude managed to stand on the 66-dollar level.
For the coming week, the market will watch closely on U.S.-China trade negotiations as well as the U.S.-Germany dispute over "Nord Stream 2."
Germany said Saturday it was against the U.S. approval of sanctions against the Nord Stream 2 gas pipeline, claiming "they affect German and European companies and represent interference in our internal affairs."
U.S. President Donald Trump on Friday signed into law a 738-billion-U.S.-dollar defense bill which includes controversial provisions calling for sanctions against Russia and Turkey. The U.S. bill said it could protect European energy security by imposing sanctions related to Russian energy pipelines Nord Stream 2 and TurkStream.
German Chancellor Angela Merkel on Wednesday slammed the United States for imposing sanctions related to Nord Stream 2, a twin pipeline stretching 1,230 km from Russia to Germany via the Baltic Sea, which is scheduled to start operation in the middle of 2020.
Moreover, the global oil inventories level is an important factor to affect oil prices in the near future.
In its year-end Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecast that Brent spot prices will be lower on average in 2020 than in 2019 due to forecast of rising global oil inventories, particularly in the first half of next year.
EIA forecast Brent spot prices will average 61 U.S. dollars per barrel in 2020, down from the 2019 average of 64 dollars per barrel, while WTI prices will average 5.50 dollars per barrel less than Brent prices in 2020.
Editor:Cherie
