Brent crude rose above $50 a barrel for the first time in more than six months as a drop in U.S. stockpiles accelerated a rebound from a 12-year low after global disruptions trimmed the market’s glut.
Futures rose as much as 0.8 percent in London to the highest intraday price since Nov. 4, after climbing 2.9 percent the previous two sessions. U.S. 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 almost 80 percent since dropping to the lowest since 2003 in January on signs the global oversupply will ease. The final preparatory gathering of the Organization of Petroleum Exporting Countries officials before a ministerial meeting next week didn’t 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 U.S. crude stockpiles, helping to nudge the price up a bit further,” Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone. “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 July settlement climbed as much as 39 cents to $50.13 a barrel on the London-based ICE Futures Europe exchange and was at $50.09 at 12:40 p.m. Hong Kong time. 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, the U.S. marker grade.
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WTI for 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 percent below the 100-day average. Prices are up about 90 percent from a February low.
U.S. 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 Wednesday. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell by 649,000 barrels.
Oil-market news:
Royal Dutch Shell Plc will cut 2,200 more jobs, taking the tally of losses to 12,500 from 2015 to 2016 as Europe’s biggest oil producer continues to adjust to the slump in prices. The French government said it was prepared to endure weeks of strikes at refineries and began releasing strategic oil reserves to help ease nationwide fuel shortages. Energy companies led gains on the MSCI Asia Pacific Index.
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