Brent North Sea oil for July delivery climbed $1.14 to $48.97 a barrel in London. The US dollar declined to 1.1319 per euro.
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Oil prices have risen to a six-month high, jumping 75 per cent since the start of the year, as problems of oversupply wane.
Yet countering these disruptions was rising supply from the Organization of the Petroleum Exporting Countries (OPEC) following the lifting of sanctions against Iran which triggered a race for market share between Tehran and OPEC-rivals like Saudi Arabia, Iraq, the United Arab Emirates and Kuwait. A push above US$50 a barrel could also trigger some oil operators to restore production, he said.
International Brent crude futures were trading at $48.11 per barrel at 0148 GMT, up 28 cents, or 0.6 percent, from their last settlement.
A crude oil trader informed that oil prices have gained in the past two weeks, driven by outages in Nigeria, Venezuela and declining U.S. production. Nationwide crude oil inventories hit an all-time high of 543.6 MMbbls in the week ending April 29, 2016.
WTI for June delivery increased 59 cents to settle at US$48.31 (RM194.08) a barrel on the New York Mercantile Exchange.
“Disruptions to supply, rising demand and falling USA output have helped to push prices up near the $50 level”, David Lennox, an analyst at Fat Prophets in Sydney, said by phone.
Futures climbed as much as 1.2 percent in NY after rising 3.3 percent Monday. Oil output in China fell 5.6%, to 4.04 MMBPD. Iran, the world’s fourth largest oil producer and number two exporter in the Organization of the Petroleum Exporting Countries, is set to ship 2.1 million bpd in May, almost 60 percent above their level a year ago. Lackluster global economic growth over the last two years dragged on energy prices in a market flush with oil.
We are still far from shielded from the rise in oil prices as we could probably be seeing another major oil glut as reported by Reuters, Brent could approach $50 per barrel, but analysts are anxious about 2014 situation where prices hit $100 a barrel.
Goldman analysts warned the market would return to a surplus in the first half of 2017, as estimated prices around $50/Bbl in the second half of this year would see exploration and production activity pick up.
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Barclays said that “while the supply-side disruptions are supporting oil market balances, refinery margins are starting to weaken, especially in Asia”, adding that weaker demand from those refiners could produce “downside risk to prices in Q3 16”.
