Oil prices rose early today, with Brent jumping back above US$50 (RM199.69) per barrel, as investors positioned themselves for more price increases this year in expectation of a tighter market.
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Putting a floor under prices was a modest weakening in the USA dollar, which had rallied sharply in the wake of the Brexit vote. The more active Brent contract for September delivery traded at $50.04, down 2.4 percent.
Oil extended declines to trade near $46 a barrel as the market remained volatile after the United Kingdom last week voted to leave the European Union.
He also said the turmoil in Europe was not expected to have a “meaningful impact on the physical global supply and demand balances”.
US crude futures rose 40 cents, or 1 percent, to $48.25.
Global markets found some relief Thursday after the Bank of England said some short-term stimulus was possible in the wake of the economic panic that followed last week’s vote to leave the European Union. USA crudewas down 37 cents, or 0.74 percent, at $49.51 a barrel.
Brent crude futures were 31 cents higher at $48.89 per barrel, while US WTI crude was up 40 cents to $48.25 a barrel.
West Texas Intermediate fell as much as 61 cents, or 1.2 percent, to $49.27 a barrel on the New York Mercantile Exchange and traded at $49.50 at 7:41 a.m. London time. U.S. crude was down 43 cents, or 0.84 per cent, at $49.45 a barrel. Surprisingly robust US shale output, rising Iranian oil production and economic turbulence could all disrupt any supply-demand equilibrium.
Later in the day, traders will also look to the latest US oil rig count, which is as a rough proxy for activity in the industry.
Supply disruptions and falling USA output have helped cut a global surplus, sparking a rally of more than 85% since prices hit a 12-year low in February. The rebound came after a wildfire in Canada, which erased some one million barrels of daily oil supply from the market, and problems in Nigeria.
Volumes in key Brent and USA crude futures were significant for New York’s morning trade despite the hesitation typically common before a long weekend.
The American Petroleum Institute trade group indicated on Tuesday that USA crude inventories fell by almost 4 million barrels in the week to June 24, some two-thirds more than the 2.4 million barrel decline forecast by analysts in a Reuters poll.
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2016 started at a low for oil and gas majors.
