Oil makes biggest annual gain since 2009 before Opec cut

Houston: Oil made the biggest annual gain since 2009 as Opec and other producing nations plan to start supply cuts next month to reduce swelling global inventories.
Futures rose 52 per cent in London this year after closing little changed on Friday. US crude inventories unexpectedly expanded for a second week with a gain of 614,000 barrels last week, the Energy Information Administration reported on Thursday. US drillers expanded for a ninth-straight week, boosting active oil rigs to 525, according to data from Baker Hughes Inc. on Friday. Shale drillers have added 100 rigs since September, the biggest three-month gain since the boom times of first-quarter 2014.
Brent, the global benchmark, marked its first annual advance in four years in 2016 as the Organisation of Petroleum Exporting Countries and 11 other nations push ahead with a plan to cut output. While they have managed to buoy sentiment and lift prices from below $30 a barrel early this year, the rising number of rigs in the US and the possibility of members not sticking to output targets are a risk. US inventories remain at the highest seasonal level in more than three decades.
“What a difference a year makes,” Phil Flynn, senior market analyst at Price Futures Group in Chicago, said on Friday by phone. After doom-and-gloom sentiment closed out 2015, the market is now “probably the most optimistic we are looking going into a new year in energy in many, many years.”
Brent for March settlement closed 3 cents lower at $56.82 a barrel on the London-based ICE Futures Europe exchange on Friday. The February contract expired on Thursday after losing 8 cents to $56.14. Total volume traded was about 60 per cent below the 100-day average.
US stockpiles
West Texas Intermediate for February delivery settled down 5 cents to $53.72 a barrel on the New York Mercantile Exchange. The contract fell 29 cents to $53.77 on Thursday. Prices are up 45 per cent this year. The 614,000-barrel increase in US crude inventories last week compared with a 1.5 million-barrel decline forecast by analysts surveyed by Bloomberg, while American Petroleum Institute data showed a 4.2 million-barrel expansion. Crude production dropped for a second week, while stockpiles at Cushing, Oklahoma, the delivery point for WTI, grew by 172,000 barrels to 66.4 million.