Oil prices ended with a modest gain on Friday but notched up a loss for a second week as traders continued to assess the outlook for energy demand in the wake of the China-US trade deal and final Senate approval of the US-Mexico-Canada trade pact.
But US natural gas prices ended at near four-year lows on Friday as US winter weather remained warm and demand weakened.
While both deals were seen as positive for oil prices, two big negatives reasserted themselves – both OPEC and the International Energy Agency both issued gloomy forecasts for 2020, predicting anther rise in non-OPEC production, despite a small rise in expected daily demand.
The upshot from both forecasts is that the rising non-OPEC output will continue to swamp global oil markets, capping prices and at times forcing them lower, as we saw last week.
Both Brent and West Texas Intermediate (WTI) oil prices fell for a second successive week. Brent saw a weekly loss of about 0.2%. while WTI dropped nearly 0.9%.
Oil prices had spent the first half of the week moving lower thanks to those oversupply concerns and a continued easing in the geopolitical fears triggered by the US-Iran tensions. The two trade pacts then helped prices steady and edge higher on Thursday and Friday.
West Texas Intermediate crude for February delivery ended little changed, up 2 cents, or 0.03%, to settle at US58.54 a barrel in New York, after rising 1.2% on Thursday.
In Europe, March Brent futures rose 23 cents, or 0.4%, to end at $US64.85 a barrel following a 1% rise the day before.
Baker Hughes on Friday reported a sharp rise in the number of active rigs drilling for oil last week – up by 14 to 673. That followed declines for oil rigs in each of the past three weeks. The total active US rig count rose by 15 from last week to 796, according to Baker Hughes.
On Nymex, prices for natural gas settled at their lowest front-month futures contract settlement since May 2016.
February natural gas fell 7.4 cents, or 3.6%, to settle at $US2.003 per million British thermal units. Prices slumped 9% last week.