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Oil Jumps Despite Rising OPEC Production

December 5, 2018 at 18:50 by Andrew Moran

Crude oil futures are rising on Wednesday, despite the Organization of the Petroleum Exporting Countries (OPEC) raising output in November. Oil prices are posting gains on forecasts that the US government will report a weekly decline in supplies, the first in 11 weeks.

January West Texas Intermediate (WTI) crude futures tacked on $0.44, or 0.83%, to $53.69 per barrel at 16:54 GMT on Wednesday on the New York Mercantile Exchange. Oil prices have surged nearly 7% over the last trading week, but they have cratered more than 13% over the past month. Year-to-date, US crude is down 6.9%.

Brent, the international benchmark for oil prices, is also advancing midweek. February Brent crude futures edged up $0.30, or 0.48%, to $62.38 per barrel on London’s ICE Futures exchange. Brent prices have slipped just 1% so far this year.

According to a new S&P Global Platts report, OPEC output climbed by 40,000 barrels per day (bpd) to 33.08 million barrels last month. Saudi Arabia boosted production by 350,000 bpd, the United Arab Emirates (UAE) jumped 130,000 bpd, and Iran fell three million bpd. Overall, compliance among the 12 OPEC members slid 109% last month, from 118% in October.

With the national day of mourning to honor the passing of former President George H.W. Bush, the stock market was closed. As a result, the US Energy Information Administration (EIA) will delay its weekly oil report until Thursday. The market is forecasting a decline of 2.39 million barrels in domestic crude supplies, which would be the first decline since the end of September.

The Baker Hughes total rig count stood at 887, up from 885 a week ago.

In other energy commodities, January natural gas futures tumbled $0.03, or 0.65%, to $4.42 per million British thermal units (btu). January gasoline futures added $0.02, or 1.38%, to $1.46 per gallon. January heating oil futures were flat at $1.90 a gallon.

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