Oil rises from two-month low on Nigeria’s outages
Oil climbed from a two-month low as global equities rose, a weaker dollar boosted the appeal of commodities and a new disruption worsened supply problems in Nigeria.
Futures advanced as much as 3.6 percent in New York. The dollar slipped against many of its peers, while stocks rose on the prospect of stimulus in major economies. Royal Dutch Shell Plc said the Trans Niger pipeline in Nigeria, capable of shipping 180,000 barrels a day, was halted after the discovery of a leak. U.S. crude stockpiles probably fell 3.25 million barrels last week, according to a Bloomberg survey before government data Wednesday.
“The weak dollar is clearly helping pull us higher,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $4.9 billion. “We tested the low end of the range of $45 to $50 yesterday. Prices dropped below $45 and the buying started again.”
Oil has retreated in recent weeks as a rally spurred by supply disruptions in Nigeria and Canada and falling U.S. output lost momentum. Prices remain up about 70 percent from a 12-year low in February, a recovery that has prompted American producers to return drilling rigs to service. The rate of decline in non-OPEC supply will slow next year, OPEC said in a report Tuesday.
West Texas Intermediate crude for August delivery rose $1.26, or 2.8 percent, to $46.02 a barrel at 11:19 a.m. on the New York Mercantile Exchange. Prices slipped 1.4 percent to settle at $44.76 on Monday, the lowest since May 10. Total volume traded was 20 percent above the 100-day average.
Brent for September settlement advanced $1.40, or 3 percent, to $47.65 a barrel on the Londonbased ICE Futures Europe exchange. The global benchmark traded at an 85-cent premium to WTI for September delivery.