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Oil is above $50 for the first time in nearly six months as supplies drop | |
(about 5 hours later) | |
Brent crude rose above $50 (£34) a barrel for the first time in more than six months as a drop in US stockpiles accelerated a rebound from a 12-year low after global disruptions trimmed the market’s glut. | |
Futures rose as much as 0.8 per cent in London to the highest intraday price since 4 November, after climbing 2.9 per cent the previous two sessions. | |
US inventories slid by 4.23 million barrels last week, exceeding an expected drop of 2 million. | US inventories slid by 4.23 million barrels last week, exceeding an expected drop of 2 million. |
Attacks in Nigeria have cut production to a 20-year low and Venezuela is struggling to maintain output amid power cuts, while producers in Canada are beginning to restart oil-sands operations halted by wildfires. | |
Brent has surged about 80 per cent since dropping to the lowest since 2003 in January on signs the global oversupply will ease. | Brent has surged about 80 per cent since dropping to the lowest since 2003 in January on signs the global oversupply will ease. |
The final preparatory gathering of officals from the Organisation of Petroleum Exporting Countries (OPEC) before a ministerial meeting next week did not include discussions on limiting output, signaling the group will stick with its strategy of defending market share. | |
“The immediate driver is a good draw on US crude stockpiles, helping to nudge the price up a bit further,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. | |
“The market hasn’t had any bad news to knock it off its perch but the price is likely to struggle if it gets into the $50s. There is still quite a bit of inventory around.” | “The market hasn’t had any bad news to knock it off its perch but the price is likely to struggle if it gets into the $50s. There is still quite a bit of inventory around.” |
Brent for the July settlement climbed as much as 40 cents to $50.14 a barrel on the London-based ICE Futures Europe exchange and was at $50.10 in Hong Kong. The contract increased $1.13 to $49.74 on Wednesday. The global benchmark crude was at a premium of 22 cents to West Texas Intermediate (WTI), the US marker grade. | |
WTI for the July delivery climbed as much as 37 cents to $49.93 a barrel on the New York Mercantile Exchange. | |
The contract gained 94 cents to $49.56 on Wednesday. Total volume traded was about 32 per cent below the 100-day average. Prices are up about 90 per cent from a February low. | |
US crude production dropped for an 11th week to 8.77 million barrels a day, the lowest level since September 2014, the Energy Information Administration reported on Wednesday. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell by 649,000 barrels. | |