Our listed energy stocks are also on a tear as the overnight surge in the crude price to a three-year high is prompting some to ask if oil is heading towards US$100 a barrel.
The price for Brent crude oil, the global benchmark, was up 0.44 percent at 9:20 a.m. EST to $68.08 per barrel.
While prices fell, the reaction was somewhat muted, which analysts said is a sign that oil's rally isn't yet over.
Although subject to a complex array of socio-economic, geo-political and technology factors, oil prices are largely determined by expectations of future supply and demand.
Experts expect that commercial oil reserves in the U.S.
The higher US prices are driven by continued declines in the amount of crude oil in the nation's commercial stockpiles.
The price spread between Brent and WTI was significantly greater in 2017 than in 2016. [RIG/U] Fatih Birol, head of the Paris-based International Energy Agency, said oil prices at $65 to $70 risked encouraging more oversupply from US shale drillers."If you look at any kind of momentum indicator this is telling you this is way overbought", said Robert Yawger, director of energy futures at Mizuho in NY.
The greenback-denominated commodity has also benefited from weakness in the dollar, which neared a one-week low on Thursday, as it makes oil cheaper to buy for holders of other currencies.
Analysts attributed persistent rise in prices in futures trade to widening of positions by participants, taking positive cues from global markets where it traded at its highest level since 2014 due to ongoing production cuts led by OPEC.
Wall Street had dropped on Wednesday, the first daily decline for S&P and Nasdaq in 2018, after a report China would slow U.S. government bond purchases and a report that U.S. President Donald Trump would end a key trade agreement. WTI Crude oil is now trading at $63.39 per barrel, down 0.64% on the day.
Brent for March settlement advanced to $69.90 a barrel on the London-based ICE Futures Europe exchange at 11:28 Eastern time.
The Brent-WTI price spread averaged more than $3.33/b in 2017. This price difference is expected to narrow from the $6/b average price difference seen in the fourth quarter of 2017 because current constraints on the capacity to transport crude oil from the Cushing, Oklahoma storage hub (the geographic location associated with the WTI price) to the U.S. Gulf Coast are expected to gradually lessen.
As shale oil development trends are rather uncertain, it is possible that the upward trend in crude oil prices will continue.
The strength of the oil market would have caught many analysts by surprise as the consensus forecast for oil is probably somewhere in the US$50s per barrel for 2018.
Import and Export Prices for December will be issued at 8.30 am ET.
Last week, the American Petroleum Institute (API) reported a large draw of 4.992 million barrels of crude oil, along with an increase in gasoline inventories of 1.87 million barrels.
For more information on crude oil, visit the S&P Global Platts website.