Oil prices rose Monday morning, following three straight weeks of declines. Brent crude had increased by 0.65% as of 09.00 AM GMT, to trade at $63.64/bbl, while WTI was trading at $57.61/bbl at the same time, a gain of 0.54%. Crude markers were strongly supported by the ongoing closure on the forties pipeline system, following the declaration of a force majeure last week. Additionally, Nigerian upstream workers went on strike on Monday, following failed negotiations with the government. The strike is likely to impact the country’s production and exports of crude oil. Almost 33 million bbls of Nigerian crude oil had been exported during December to date, suggesting an elevated pace compared to November’s overall 50.73 million bbls. December exports could stand as high as 53.34 million bbls in December according to fixture data.
Speculators in the US saw their net position in derivatives shrink by 1.56 million bbls, following strong gains in November, ahead of OPEC’s meeting Longs were trimmed by almost 4 million bbls last week, while shorts dropped by 2.43 million bbls. Producers on the other hand lifted their net position by a combined 6.23 million bbls, an outcome of a 25.25 million bbls build in longs, which was however partly offset by a 19 million bbls increase in shorts. Producers’ net position is currently at 47.74 million bbls net short.
Producers also trimmed the number of active drilling rigs to 747 units from 751 previously. The decline is the first one following six weeks of gains as crude prices have shouldered improving economics for producers, who have lifted total output at 9.78 million bpd, according to the latest weekly EIA data.
The Oil Research Team
Supply Chain & Commodities Research