Oil trades near $52 as investors eye Libyan crude output return

Oil has traded near $50 a barrel since the Opec countries agreed to reduce production for the first time in eight years

Oil hovered near $52 a barrel as investors eyed the potential return of crude volumes from Libya and await output cuts in January as part of an Opec and non-Opec deal.
 
Futures were little changed in New York after swinging between gains and losses. Libyan oil-facility guards backtracked on an agreement to allow supply to flow from the El Feel and Sharara fields, two of the country’s biggest fields. Investors await production cuts by Opec and non-Opec producers starting early next year.
 
Oil has traded near $50 a barrel since the Organisation of Petroleum Exporting Countries (Opec) agreed November 30 to reduce production for the first time in eight years. Many non-Opec producers, such as Russia, agreed to join the deal as well. Goldman Sachs Group last week increased its second-quarter crude-price forecasts and predicted stockpiles would return to normal by mid-2017 amid the curbs.

 

There are little fundamental drivers until the market can evaluate Opec, non-Opec production cuts in January, according to Mike Dragosits, senior commodity strategist at TD Securities in Toronto. “We’re in a pretty quiet period now. What you’re seeing is a reaction to the US dollar flows,” he said by telephone. WTI for January delivery, which expires on Tuesday, fell five cents to $51.85 a barrel at 9:58 am on the New York Mercantile Exchange. Total volume traded on Monday was about 20 per cent below the 100-day average. The more-active February future was down seven cents to $52.88.
 

Brent for February settlement dropped 15 cents, or 0.3 per cent, to $55.06 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.18 to WTI for the same month.
 
The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, was little changed, after falling as much as 0.3 percent earlier.