Brent oil breaks above $50 for first time in 7 months

Record ID: 101874

  • Title: Brent oil breaks above $50 for first time in 7 months
  • Date: 26th May 2016
  • Summary: LONDON, ENGLAND, UK (MAY 26, 2016) (REUTERS) (SOUNDBITE) (English) PANMURE GORDON, MARKET COMMENTATOR, DAVID BUIK, SAYING: "All in all because Saudi Arabia has been the kingpin in terms of trying to destroy the oil price, in order to keep the United States self-sufficiency back for a little bit. But then we have had problems with Nigeria and then we have had problems in Canada and also the demand has picked up which has slightly surprised people. So we have got oil at somewhere near 50 dollars a barrel, I think in terms of Brent did touch 50 dollars per barrel and is probably still there. I would think that is temporary and I would expect that to come back perhaps when we have got these political idiosyncrasies out of the way for the time being to maybe 40 dollars a barrel. But certainly our oil analysts believe that we will see 50 dollars at the end of this year."
  • Embargoed: 10th June 2016 12:16
  • Keywords: oil brent crude 50 dollars. United States Russia Saudi Arabia Nigeria Iran OPEC
  • Location: LONDON, ENGLAND, UK/ AT SEA/ UNKNOWN
  • City: LONDON, ENGLAND, UK/ AT SEA/ UNKNOWN
  • Country: Various
  • Topics: Commodities Markets,Economic Events
  • Reuters ID: LVA0034JG2LCD
  • Aspect Ratio: 16:9
  • Story Text: Brent oil futures climbed above $50 a barrel on Thursday (May 26) for the first time in nearly seven months as a global supply glut that plagued the market for nearly two years showed signs of easing.
    Oil prices have rallied in recent weeks as a string of outages, due in part to wildfires in Canada and unrest in Nigeria and Libya, knocked out nearly 4 million barrels per day of production.
    "Above 50 dollars a barrel the show is on the road for the United States of America, but as I say, I don't think the United States will really move in that direction until I see a sustained 50 dollars plus. So maybe temporarily they will captialise on it but as I say I don't think there is any strength there from the world's economy to suggest that that level, and this is political, will be sustained for the next few months. Though I do believe by the end of the year it will," Panmure Gordon, Market Commentator David Buik said.
    Above $50 a barrel, oil was seen by many market players as breaching a psychological barrier that could lead producers, particularly among U.S. shale companies, to revive operations scrapped in recent years.
    Global benchmark Brent crude oil was up 31 cents at $50.05 a barrel at 0935 GMT, the highest in nearly 7 months, after a larger-than-expected draw in U.S. crude oil inventories last week indicated buyers are starting to mop up spare supply.
    U.S. crude futures were up 30 cents at $49.86 a barrel, after touching $49.97, the highest since mid-October.
    A source at oil producer Chevron said on Thursday its activities in Nigeria had been "grounded" by a militant attack, worsening a situation that had already restricted the supply of hundreds of thousands of barrels.
    "All in all because Saudi Arabia has been the kingpin in terms of trying to destroy the oil price, in order to keep the United States self-sufficiency back for a little bit. But then we have had problems with Nigeria and then we have had problems in Canada and also the demand has picked up which has slightly surprised people. So we have got oil at somewhere near 50 dollars a barrel, I think in terms of Brent did touch 50 dollars per barrel and is probably still there. I would think that is temporary and I would expect that to come back perhaps when we have got these political idiosyncrasies out of the way for the time being to maybe 40 dollars a barrel. But certainly our oil analysts believe that we will see 50 dollars at the end of this year," Buik added.
    A meeting of the Organization of the Petroleum Exporting Countries on June 2 in Vienna to discuss the oil market added further support.
    However, the recent rise in oil prices and friction between key members Saudi Arabia and Iran mean a coordinated effort to intervene to support prices is slim.
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