Oil rises from two-month low on Nige­ria’s out­ages

Daily Trust - - BUSINESS -

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.

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