Brent crude oil, the global oil benchmark, rose above $50 a barrel for the first time since November.
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U.S. West Texas Intermediate (WTI) crude futures were trading at USD49.44 per barrel at 0108 GMT, up 11 cents from their last settlement. It ended the previous session up $1.13, or 2.3 percent. An uncontrollable wildfire in northern Alberta has reduced Canada’s oil production by more than 1 million barrels per day for the last two weeks.
However, despite the failure in Doha, the oil prices began to rise gradually, especially in April.
Oil has been a touchy commodity ever since the Fed interest rate hike updates and it has now gone over $50 a barrel prompting many investors to take advantage of this oil price high.
The rise followed U.S. data showing that oil inventories had fallen after supply disruptions due to fires in Canada.
Crude has been rebounding sharply after a lengthy rout, soaring 80% since hitting a low of below 28 United States dollars a barrel at the start of the year amid a global supply glut. “There is probably a sliver of hope that OPEC producers will hammer out an agreement to support oil prices, be it to freeze production or otherwise”, said IG Asia analyst Bernard Aw.
Despite the current relatively positive trend in oil prices, analysts do not expect significant growth in prices this year. “Whether it will stay above $50 or not, that is going to tell us whether the producers can breathe a sigh of relief”, she said. The blaze forced evacuations and halted production of more than 1 million barrels a day.
Oil prices are set to increase further following a proposed meeting of the Organization of the Petroleum Exporting Countries on 2 June in Vienna, Austria.
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Mr Larry also cited next week’s Opec meeting to discuss world production levels as a reason for the cautious market action. But the recent disruptions due to militant attacks have prevented the country from benefitting from the increase in oil price. The July contract gained 0.7 per cent to $50.08 a barrel today, while WTI oil futures, rose 0.6 per cent to $49.86. “At the $50-$55 range there has got to be a good chance of seeing the peak”. Venezuelan production has been hit by power cuts and Canadian volumes have been curbed by wildfires.
