Bloomberg
Oil futures settled higher Monday on hopes that several weeks of declines in the number of U.S. oil-drilling rigs and talk from major producers over the potential for a freeze in output will help ease excess supplies of crude.
But despite volatile moves for the commodity in February, West Texas Intermediate prices finished little changed from where they began.
April West Texas Intermediate crude CLJ6, +1.33% settled at $33.75 a barrel, up 97 cents, or 3%, on the New York Mercantile Exchange.
Based on the front-month contracts, prices saw a monthly rise of roughly 0.4%, according to data from Dow Jones.
Read: This is what drove the oil market’s wild February gyrations
April Brent crude LCOJ6, +2.48% which expired at the settlement on London’s ICE Futures exchange, tacked on 87 cents, or 2.5%, to $35.97 a barrel. For the month, prices gained 3.5%.
“The oil market appears trapped between bullish and bearish factors, leaving neither side satisfied with market direction in coming months,” said Rob Haworth, senior investment strategist, U.S. Bank Wealth Management.
On Monday, bullish bets were rising “from mammoth hedge funds which are optimistic that the supply glut…will start to fade away soon,” Naeem Aslam, chief market analyst at AvaTrade, told MarketWatch.
Oil producers “have instigated the process to address the problem,” he said. Earlier this month, Russia, Saudi Arabia and other producers said they wouldn’t increase oil output above January’s levels as long as other major producers followed suit.
But Iran has been quite clear that cuts are not on the table, said Robbie Fraser, commodity analyst at Schneider Electric, with their oil minister calling the idea of a production freeze “a joke.”
‘The premium that has been added into the price of oil every time an OPEC member hints at coordination is consistently and substantially overdone.’
“The premium that has been added into the price of oil every time an OPEC member hints at coordination is consistently and substantially overdone,” he said.
Still, the U.S. oil-rig count dropped for a 10th straight week, down 26 to 413, oil-field- services firm Baker Hughes reported Friday.
“The slow decline rate shows that it takes time for the U.S. shale producers to adjust to the low prices but it also shows that at this price level, it is not economical for many of them to keep going,” said Barnabas Gan, an energy analyst at OCBC.
Read: U.S. oil production is declining, but how fast will it fall?
Despite signs that production and supplies may soon decline, Aslam pointed out that “the supply glut is not going to evaporate within a blink of an eye, as it will take some time for the supply and demand equation to balance.”
What’s important is that “we are on the correct path and the price of oil will continue to recover,” he said.
Back on Nymex, March gasoline RBH6, +2.74% ended at $1.05 a gallon, up 3.3 cents, or 3.3%, with front-month prices losing about 4.8% in February. The April contract RBJ6, +0.64% which became the front-month contract at the settlement, rose 2% to $1.321 a gallon.
March heating oil HOH6, +2.48% tacked on 2.5 cents, or 2.4%, to $1.076 a gallon, with front-month prices gaining about 2% for the month. The April contract HOJ6, +0.93% added 2.5% to end at $1.094.
April natural gas NGJ16, -0.82% fell 8 cents, or 4.5%, to end at $1.711 per million British thermal units, with front-month prices losing about 25.5% for the month.
— Nicole Friedman and Harriet Torry contributed to this article.
