2017 to begin with strong oil, natural gas prices
After plummeting in early 2016, oil and natural gas prices have finished the year on a strong note, giving hope to industry leaders and state economists that the state’s largest industry will continue to recover in 2017.
Oil prices steadily have increased from 12-year lows near $26 a barrel in February, gaining steam after the Organization of Petroleum Exporting Countries last month agreed to cut production quotas. Domestic benchmark West Texas Intermediate crude slipped 29 cents on Thursday, but closed at $53.77 a barrel.
OPEC members last month agreed to cut production by 1.8 million barrels a day, or about 5.2 percent, to 32.5 million barrels a day, beginning Jan. 1. Non-OPEC producers agreed to an additional 558,000 barrels a day in cuts.
OPEC producers are notorious for overproducing their agreed-to quotas, but the deeper-than-expected reduction agreement has created optimism among producers worldwide that prices will continue to strengthen.
Natural gas has seen a similar rise in recent months. After dipping to less than $2.60 per thousand cubic feet in February, the price has surged over the past two months on winter weather, slowing production and growing demand from power plants and liquefied natural gas exports.
Written by Adam Wilmoth