By Sara Sjolin and Eric Yep
Crude-oil futures rose Monday as the excessive drop in oil prices in recent weeks sparked some buying interest and short-covering among investors before the end of the year, traders said.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February CLG5, +0.88% gained 31 cents, or 0.6%, to $57.45 a barrel. February Brent crude on London’s ICE Futures exchange LCOG5, +1.21% rose $1.86, or 3.1%, to $61.86 a barrel.
The price of Nymex crude fell 2.23% last week for the fourth consecutive week. During those four weeks, Nymex lost 26.13% — the largest percentage decline for that time period since the week ended Dec. 26, 2008. Brent crude fell 1.24% last week and has also dropped for the last four consecutive weeks, losing 23.62% of its value.
On Sunday, Gulf oil officials defended the decision of the Organisation of the Petroleum Exporting Countries last month to keep its production ceiling intact, blaming non-OPEC producers for the current oil market glut.
Saudi Arabia’s oil minister, Ali al-Naimi, blamed a lack of coordination among non-OPEC producers, along with speculators and misleading information, for the price slump. He was speaking at an energy conference in Abu Dhabi.
Oil prices have nose-dived since OPEC decided on Nov. 27 to keep its production ceiling unchanged.
Commodity analysts at Barclays said in a note on Monday that the slide in crude-oil prices probably isn’t over yet and that they for now are “committed to lower crude oil prices”.
“It would take a close above $64.25 [a barrel] this month to suggest seller capitulation,” they said in a note.
KBC Energy Economics also said it expected absolute energy prices to remain lower through the end of 2015.
Meanwhile, however, money managers continued to extend their net-long positions, betting that prices will rise. Money managers raised bullish bets on oil with a net-long position of 217,723 contracts through Dec. 16, up 13.8% from the week earlier, CFTC data showed.
Citi Futures said the strongest bullish argument for crude oil at the moment is that it looks cheap after a protracted price drop.
Nymex reformulated gasoline blendstock for January RBF5, +1.22% — the benchmark gasoline contract — rose 2 cents to $1.580 a gallon.
Heating oil for January HOF5, +0.96% rose 1 cent to $1.97 a gallon, while natural gas for the same month NGF15, -5.34% dropped 19 cents to $3.26 per million British thermal unit.
