Investing.com -- Crude futures remained near 8-month highs, while brent settled at its highest closing level of 2016 as fresh supply outages in Nigeria helped temporarily ease concerns related to persistent supply glut on global energy markets.
On the New York Mercantile Exchange, WTI crude for July delivery traded in a broad range between $48.72 and $49.89 a barrel before settling at $49.70, up 1.06 or 2.18% on the session. On the Intercontinental Exchange (ICE), brent crude for August delivery wavered between $49.78 and $50.83 a barrel, before closing at $50.51, up 0.86 or 1.73% on the day. With the considerable gains, brent futures eclipsed previous yearly highs from May 26 when it eclipsed $50.50 for the first time since early-October.
Crude defied expectations for a sizable crash last week by moving only fractionally lower after OPEC concluded its semi-annual meeting without making any progress on a comprehensive output freeze between a host of major oil producers. While Iran and Saudi Arabia reportedly went to great lengths to appear conciliatory in public, the two main Persian Gulf rivals failed to reach a consensus on a long-term plan that could result in helping lift oil back to 2014 levels. Despite the recent bounce in oil prices, crude is still down more than 50% from its peak two years ago when it topped out at $115 a barrel. OPEC is scheduled to meet next in late-November.
Elsewhere, the latest series of attacks by a group of militants known as the Niger Delta Avengers pushed daily output in Nigeria below 1 million barrels per day, Reuters reported. As the group sabotaged facilities in Southern Nigeria on Monday, production of Bonny Light crude in the region continued to fall sharply extending losses from last month when the rogue group staged at least 10 separate attacks. Since the onset of the strikes, output of Bonny Light has declined by more than 500,000 bpd. Nationwide, crude production in Nigeria last month fell to its lowest level in more than two decades.
The production disruptions in Nigeria have helped narrow the wide supply-demand imbalance on global markets. Each day producers worldwide pumped an average of 96 million barrels of oil during the first quarter, according to the Paris-based International Energy Agency, as supply outpaced demand by 1.4 million bpd.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.15% to an intraday high of 94.27, before turning slightly negative on Monday afternoon. It came after Federal Reserve chair Janet Yellen omitted the timing of a near-term rate hike from the U.S. central bank's current monetary policy outlook. The index has tumbled more than 5% since early-December.
Dollar-denominated commodities such as crude become more expensive for foreign purchasers when the dollar appreciates.