Oil set for longest run of gains in 5 years before OPEC meeting
NEW YORK (Bloomberg) -- Oil is set for the longest run of monthly gains in five years as output disruptions from Nigeria to Canada reduce supply before OPEC meets Thursday in Vienna to discuss production policy.
Futures gained as much as 0.9% in New York, set for a fourth monthly advance. Militant attacks have cut Nigerian supply to the lowest level in more than two decades. While Canadian output fell amid wildfires, producers are starting to resume operations after the blaze eased. Libya’s Petroleum Facilities Guard captured a town near the Es Sider and Ras Lanuf oil-loading terminals after fierce clashes with Islamic State militants.
Oil has surged more than 85% since slumping to a 12-year low in February on signs the worldwide surplus is easing amid declining production from the U.S. to Nigeria. The Organization of Petroleum Exporting Countries is unlikely to reach any agreement to limit output when it meets June 2 as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
“Consolidation on the supply side has paved the way for the recovery of the oil price, and with oil production in the U.S. likely to fall further over the coming year, more of the same awaits,” said Jens Pedersen, senior analyst at Danske Bank. “In the near term though, the rising dollar should limit further upside to the oil price.”
West Texas Intermediate for July delivery rose as much as 44 cents to $49.77/bbl on the New York Mercantile Exchange and was at $49.42 at 9:52 a.m. in London. There was no settlement Monday because of the U.S. Memorial Day holiday. Trades will be booked Tuesday for settlement purposes. Prices are up 7.6% this month for the longest run of monthly gains since April 2011.
Libyan Battle
Brent for July settlement, which expires Tuesday, was at $49.32/bbl on the London-based ICE Futures Europe exchange after rising 0.9% Monday. Prices are set for a fourth monthly increase, also the longest streak since 2011. The more-active August contract slipped 41 cents to $49.95. The global benchmark traded at a discount of 8 cents to WTI for July.
Libyan forces took control of the town of Bin Jawad after clashes during which five petroleum guards were killed and 16 others wounded, PFG spokesman Ali al-Hasy said by phone. The nation is the smallest OPEC producer, pumping about 310,000 bpd.
