Investing.com – It looks like oil could finish the year at $45 per barrel, barring another plunge on Wall Street, of course.
For the first time in more than a week, West Texas Intermediate crude prices remained higher for most of the day, despite U.S. stock indices bouncing between positive and negative territory through the day.
U.S. settled up 72 cents, or 1.6%, at $45.33 per barrel, after settling down $1.61, or 3.5%, on Thursday.
With just another day of trading left to 2018, WTI is down 25% on the year and is off 42% from four-year highs of nearly $77 a barrel hit in early October. For the week, it was down 0.5%, for a third consecutive week of losses.
was up 58 cents, or 1.1%, at $53.31 per barrel by 2:58 PM ET (19:58 GMT). For the week it was down nearly 3%.
Brent remains down 20% on the year and is off 39% from four-year highs of nearly $87 a barrel hit in early October.
Oil prices rose on Friday despite a drop of less than 50,000 barrels in U.S. reported for last week by the Energy Information Administration (EIA). The market had forecast a 2.87-million-barrel decline.
While the rebound hardly covered the 4% price drop in the previous session, the mid-$40 psychological support building in the market since Christmas Eve’s 7% battering was evident. Until Monday, many traders had been bracing for the possibility of WTI breaking below $40.
“I think we’ll probably be range-bound at around $45 from here as I don’t expect people to be putting on major positions with just another day left to the year-end,” said Tariq Zahir of Tyche Capital Advisors, an oil-focused fund in New York. “But that, of course, will depend on what the does.”
Thin holiday trading conditions, combined with fears of a global economic slowdown and an ongoing partial U.S. government shutdown has forced oil traders to look at the stock market, rather than energy fundamentals, for daily guidance. The 7% plunge on Christmas Eve aside, WTI jumped 9% on Wednesday, in another Wall Street-inspired move.
Until this week’s swings, oil prices have mostly traded one-way — down — since tumbling from four-year highs in October, despite OPEC’s best efforts to arrest the decline.
Faced with oversupplies from record high U.S., Saudi and Russian production, OPEC pledged on Dec. 7 to cut 1.2 million barrels per day in global oil output over the next six months under its enlarged OPEC+ pact that does not include the United States.
Instead of rallying, oil prices hit 18-month lows in the three weeks since that announcement.
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Source: Investing.com
