Oil soars above $52 as Libyan production hit
Oil extended its gains above $52 a barrel as a planned production boost from Libya stalled amid continuing tension in the Opec (Organization of Petroleum Exporting Countries) member exempt from agreed output cuts, said a report.
Oil has traded near $50 a barrel since Opec agreed on November 30 to reduce production for the first time in eight years. Goldman Sachs Group last week increased its second-quarter crude price forecasts and predicted stockpiles would return to normal levels by the middle of 2017 amid the curbs that include non-Opec nations from Russia to Mexico, according to Bloomberg.
Brent crude futures were trading at $55.41 per barrel at 0043 GMT from their last close, while US West Texas Intermediate (WTI) crude oil futures were trading at $52.12 a barrel.
According to traders, these higher prices in front-month crude futures were mainly due to expectations of a tighter market from 2017.
Futures climbed as much as 1.2 per cent in New York after rising two per cent on Friday.
Libyan oil-facility guards have backtracked on an agreement to allow supply to flow from the El Feel and Sharara fields, two of the country’s biggest, according to an engineer that operates El Feel, said the report.
Money managers increased their net-long positions on West Texas Intermediate to the highest since July 2014, stated the report citing US Commodity Futures Trading Commission data.
WTI for January delivery, which expires Tuesday, rose as much as 62 cents to $52.52 a barrel on the New York Mercantile Exchange and was at $52.30 at 2:14 p.m. in Singapore, said the report.
The contract gained $1 to $51.90 on Friday. Total volume traded was about 6 percent above the 100-day average. The more-active February future gained 40 cents to $53.35 a barrel, it added.