Oil futures stepped higher on Friday, the last trading day of the year, setting up to finish 2017 at the highest level in 2 1/2 years.
West Texas Intermediate crude on the New York Mercantile Exchange CLG8, +0.55% was recently up 0.7%, or 44 cents, to $60.28 a barrel in the Globex trading session. March Brent LCOH8, +0.48% rose 46 cents, rose 0.7%, to $66.62 a barrel.
Through Thursday, the U.S. benchmark had gained 11% this year, versus 17% for the global Brent standard. The market has improved amid optimism about years of oversupply finally ebbing, capped by rising demand and the OPEC-led production-cap deal being extended through 2018. Both oil contracts have been trading at 2 1/2-year highs of late.
Crude prices finished with modest gains on Thursday after inventory reports showed a steady decline in U.S. crude stocks. The U.S. Energy Information Administration reported that domestic-crude supplies fell by 4.6 million barrels for the week ended Dec. 22, compared with a 6-million-barrel drawdown reported by the American Petroleum Institute late Wednesday.
Data due later on Friday from Baker Hughes will update on the number of active U.S. oil rigs in the U.S. Last week’s data showed the number unchanged at 747. Traders have been keeping a close eye on that tally as they remain concerned U.S. shale producers could start to ramp up production next year on back of higher oil prices.
Meanwhile, natural gas NGG18, +1.85% for February jumped 5 cents, or 1.8%, to $2.967 per million British thermal units, after surging 6.4% on Thursday, posting the biggest daily rise since Dec. 21, 2016, according to FactSet.
Arctic cold air has been keeping temperatures cold across large portions of the U.S., with forecasts calling for a continuation of that weather into the first week of January. Record-cold levels were set in Minnesota and Michigan on Thursday, according to The Weather Channel. Cold weather could support further buying of natural gas and heating oil.
January heating oil HOF8, +0.36% rose by about 1 cents or 0.4%, to $2.059 a gallon. That’s above Thursday’s settlement of $2.0521 a gallon, which marked a fresh 52-week high and the highest settlement since Feb. 27, 2015. January gasoline RBF8, -0.03% rose 0.4% to $1.80 a gallon. On Thursday, the contract finished at $1.7930 a gallon, its highest settlement since Nov. 10.
— Biman Mukherji contributed to this article