Futures Movers: Oil drops 31% in 2015 on global crude glut

Oil futures ended higher Thursday in the final trading session of 2015, but posted a steep annual drop for the second year in a row as markets continue to wrestle with a global glut of crude.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in February CLG6, +1.04%  rose 44 cents, or 1.2%, to finish at $37.04 a barrel.

For the year, the U.S. benchmark dropped 30.5% and has lost 62.4% over the last two years. Crude hadn’t dropped two years in a row since 1998.

February Brent crude LCOG6, +3.13% the global benchmark, rose 82 cents, or 2.3%%, on London’s ICE Futures exchange to settle at $37.28 a barrel. Brent fell 35% in 2015, marking its third straight yearly drop.

Oil trimmed gains somewhat after oil-field services firm Baker Hughes said the total number of U.S. oil rigs fell by two this week to 536.

Oil’s bounceback on Thursday likely reflected some short covering ahead of year-end and a three-day weekend, said Phil Flynn, senior market analyst at Price Futures Group in Chicago. U.S. markets will be closed Friday for the New Year’s Day holiday.

Flynn said traders might be nervous about maintaining short positions amid rising tensions within Iran that could threaten the implementation of a nuclear accord that was expected to result in the lifting of sanctions that have prevented the country from exporting oil.

Iran’s president has ordered his defense minister to expedite the country’s ballistic missile program following newly planned U.S. sanctions, he said Thursday, according to The Wall Street Journal.

With U.S. production “growing for the last few weeks and global inventories being near storage limits, this is yet another reminder that the supply glut could take a long time to clear, which may mean even lower oil prices in the near term,” said Fawad Razaqzada, analyst at Forex.com, in a note.

Saudi Arabia is planning for lower oil prices next year after delivering a budget plan earlier this week that aims to boost non-oil revenues and cut spending, Razaqzada said.

But the country is showing no signs of pulling back on output. On Wednesday, Saudi Arabia’s energy minister said his country won’t adjust output despite falling prices.

Adding to the bearish prospects, the man who nailed the 2015 oil plunge is predicting a dismal 2016.

Natural gas futures briefly trimmed early gains after the Energy Information Administration said gas in storage fell 58 billion cubic feet in the week ended Dec. 25, slightly more than the 54 billion cubic feed penciled in by analysts surveyed by The Wall Street Journal. Natural gas futures have seen volatile trade this week on changing weather forecasts after plunging to 14-year lows earlier this month.

Natural-gas futures for February NGG16, +5.28%  rose 12.3 cents, or 5.6%, to $2.337 per million British thermal units. Natural gas saw a 19% annual decline for its second consecutive yearly loss.

Read: 9 stocks to play a rebound in 2016 oil prices

Nymex reformulated gasoline blendstock for January RBF6, +2.24% rose 3.71 cents, or 3%, to end at $1.2672 a gallon. Gasoline futures, however, have fallen more than 11% in 2015, helping drive the average prices at the gas pump below $2 a gallon.

See: Gas is under $2 at 71% of U.S. gas stations.

January heating oil futures HOF6, +1.42%  rose 2.16 cents, or 2%, to $1.1007 a gallon, but saw a 40% annual drop.

Plus: Your definitive guide to commodities prices in 2016

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