The December 2017/2018 spread stood at 24 cents/b at 4:30 pm Singapore time (0830 GMT) Thursday, the highest since May 30, when it stood at 38 cents/b at 0830 GMT. "And the persistent strength in the global economy is finally registering".
Futures rose 5.1% last week in NY, settling just below the $50-a-barrel threshold that's kept the industry in thrall.
OPEC and the International Energy Agency buoyed crude markets with higher demand forecasts that signalled the glut that's weighed on prices may contract further.More news: International Business Machines (NYSE:IBM) Shorted Shares Increased By 5.01%
Opec said production in August fell by 79,000 barrels a day (bpd) to 32.76 million as falling production from Venezuela, Iraq, the UAE and Saudi Arabia offset rising output from Nigeria.
That was followed by a report from the International Energy Agency (IEA) saying the glut was shrinking thanks to strong European and USA demand, as well as production declines in OPEC and non-OPEC members. "Of course, OPEC are hardly likely to say anything else, but the backward action in the front end Brent futures does give credence to the statement in this case", OANDA senior market analyst Jeffrey Halley said in a note Wednesday. The Paris-based IEA, which advises most major economies on energy policy, increased its estimate for demand growth in 2017 by 100,000 barrels a day to 1.6mn a day, or 1.7%.
"On the USA side, steadily declining rig counts of late have raised the possibility of stalled US production gains, with current output still holding below pre-Harvey levels", said Robbie Fraser, commodity analyst at Schneider Electric (PA:), in a note.More news: Apple iPhone 8 Major Rumor Confirmed?
"The record fall in gasoline inventory is also stoking views that the demand for crude oil will increase substantially as refineries came back online and seek to rebuild stockpiles", the ANZ Research analysts said.
"Based on recent bets made by investors, expectations are that markets are tightening and that prices will rise, albeit very modestly", the agency said.
Oil prices, which have recently received some support from reports about discussions of another possible extension of the OPEC production cut deal, remained stable following the release of the EIA report, with WTI trading at US$48.75 a barrel and Brent crude at US$54.62 a barrel.More news: Olympic Games: Paris in 2024 and Los Angeles in 2028
Drillers cut seven oil rigs in the week to September 15, bringing the total count down to 749, the least since June, General Electric Co's Baker Hughes energy services firm said in its closely followed report.
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