Oil rises back towards 8-month highs amid global supply outages
Investing.com
Published Jun 06, 2016 09:36AM ET
Oil rises back towards 8-month highs
Investing.com - Oil prices rose towards an eight-month high in North American trade on Monday, as investors shifted their focus back to global supply outages.
Concerns over a disruption to Nigerian supplies escalated after the Niger Delta Avengers militant group claimed responsibility for three new attacks on the country's oil infrastructure over the weekend, promising to cut production to zero.
Meanwhile, in the U.S., Exxon Mobil (NYSE:XOM) reported a pipeline failure and spill at its Torrance refinery near Los Angeles.
Oil prices have been well-supported in recent weeks as traders eyed supply disruptions in Nigeria, France, Canada and Venezuela.
On the ICE Futures Exchange in London, Brent oil for August delivery rose to an intraday high of $50.78 a barrel. It last stood at $50.47 by 13:35GMT, or 9:35AM ET, up 83 cents, or 1.67%.
Brent prices hit an eight-month peak of $50.96 in late May as unplanned supply disruptions in Africa eased concerns over a global glut. Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February.
Elsewhere, crude oil for July delivery on the New York Mercantile Exchange tacked on 93 cents, or 1.91%, to trade at $49.55 a barrel after rising to a daily peak of $49.85.
New York-traded oil lost 55 cents, or 1.12%, on Friday, after data showed the U.S oil rig count rose the first time in 11 weeks last week.
Oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. increased by nine last week to 325, ending three straight months of weekly declines.
The renewed gain in U.S. drilling activity fueled speculation that domestic production could be on the verge of rebounding in the weeks ahead, underlining worries over a supply glut.
U.S. crude futures are still up nearly 80% since falling to 13-year lows at $26.05 in February as a decline in U.S. shale production boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the oil rig count might start rising further and the decline in U.S. production may slow.
Meanwhile, Brent's premium to the WTI crude contract stood at 92 cents a barrel, compared to a gap of $1.02 by close of trade on Friday.
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Written By: Investing.com
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