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The WTI benchmark was trading up more than 8 percent on Wednesday afternoon, after a rather brutal Christmas Eve that left oil bulls bloody.
Oil prices were up even higher earlier on Wednesday, with WTI trading up more than 10 percent shortly after 4:00pm EST. Oil’s rise was in lockstep with the Dow Jones and the Nasdaq, which also saw big gains on Wednesday, both rising more than 5 percent, and came after Russian Energy Minister Alexander Novak reassured the market that it would see more stability in 2019 as OPEC and its allies strengthened its cooperation.
Big oil fared well on Wednesday as well, with the United States’ four largest oil companies seeing big gains. Exxon Mobil Corporation (XOM) up 4.68%, Chevron (CVX) up 6.34%, ConocoPhillips (COP) up 7.69%, and EOG Resources Inc (EOG) up 7.39%.
For WTI and Brent, today’s price spike of near 10% nearly erases the Christmas Eve plunge, but week on week, both benchmarks are in the red. At 4:13pm EST, WTI was trading up on the day $4.42 (+10.39%) per barrel at $46.95. That rare gain is still down from last week’s near-$48 per barrel. Brent crude was trading up $4.76 (+9.38%) at $55.53, still down from this time last week when it was a hair below $58 per barrel.
The oil market has shown great disappointment despite OPEC’s success in agreeing to another production cut agreement with Russia, which will begin in the new year. The disappointment is a culmination of factors, but includes worry over sluggish demand growth, and skepticism that OPEC’s production cuts will be insufficient to compensate for that stunted growth. The government shutdown is also worrisome for oil traders.
Novak also reassured the markets that OPEC and its allies would meet as necessary to discuss managing the oil market, even outside the regularly scheduled meeting which is to take place in April 2019.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.