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Oil reclaims $50-level for first time in 7 months

Published 05/26/2016, 03:54 AM
© Reuters.  Oil reclaims $50-level for first time since November
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Investing.com - Oil prices added to overnight gains in European trade on Thursday, with Brent futures climbing above the $50-level for the first time in seven months.

On the ICE Futures Exchange in London, Brent oil for July delivery rose to an intraday peak of $50.26 a barrel, the most since November 4. It last stood at $50.15 by 07:52GMT, or 3:52AM ET, up 41 cents, or 0.82%.

A day earlier, London-traded Brent futures jumped $1.13, or 2.32%, as traders eyed supply disruptions in Nigeria, Canada and Venezuela.

Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.

Elsewhere, crude oil for July delivery on the New York Mercantile Exchange picked up 33 cents, or 0.67%, to trade at $49.89 a barrel after prices hit a daily high of $49.97, a level not seen since October 12.

On Wednesday, New York-traded oil futures rallied 94 cents, or 1.93%, after data showed that oil supplies in the U.S. fell more than expected last week.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories declined by 4.2 million barrels last week to 537.1 million. Market analysts' expected a crude-stock decline of 2.5 million barrels.

Nymex oil prices are up nearly 85% since falling to 13-year lows at $26.05 on February 11 as declining U.S. shale output boosted sentiment. However, with prices now at levels that make drilling economical for some firms, the oil rig count might start rising soon and the decline in U.S. production may slow.

Meanwhile, Brent's premium to the WTI crude contract stood at 26 cents a barrel, compared to a gap of 18 cents by close of trade on Wednesday.

The WTI crude contract briefly flipped to a premium compared to Brent for the first time since January earlier this week, as U.S. crude is more affected by the loss of production in Canada.

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