Oil Hits 2016 High Above $40; Glut Warnings Resurface - Business - Nairaland
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| Oil Hits 2016 High Above $40; Glut Warnings Resurface by bankoleben(m): 8:30pm On Mar 07, 2016 |
Brent crude rose on Monday, hitting a 2016 peak above $40 a barrel as investors rotated more assets into raw materials, with oil buying encouraged by talk that OPEC
producers want a higher anchor price after a
selloff that has lasted nearly two years.
Gold and iron ore also were at multi-month highs. Oil prices also got a boost from data showing a smaller-than-expected build in stockpiles at the Cushing, Oklahoma delivery hub for U.S. crude futures. But some analysts cautioned that the global crude glut remained big.
Global crude prices have risen more than 40
percent since hitting 12-year lows less than two months ago. The rebound from lows of around $26 a barrel has also been driven by chart-related buying and asset rotation by investors that resulted in higher allocations into commodities such as oil and metals, as well as equities.
U.S. equities have risen about 8 percent since mid-February. Asian stock markets hit two-month highs. [MKTS/GLOB]
"Money flows from broader financial markets are powering this broader rally in oil," said Scott Shelton, energy broker with ICAP in Durham, North Carolina. "I don’t think the energy fundamentals for the next few days are going to matter much as the market is making a transition."
Brent LCOc1, the global crude benchmark, was up $2.18 at $40.90 by 1:13 p.m EST (1813 GMT). Its session peak was $41.04, the highest since Dec. 9.
Traders said price gains accelerated after market intelligence firm Genscape reported a smaller-than-expected rise in crude stockpiles at the Cushing Oklahoma delivery hub. [L1N16F0SS]
Major OPEC producers are privately starting to talk about a new oil price equilibrium of $50, New York-based consultancy PIRA told Reuters. Bullish bets on Brent hit a record high in the week to March 1, while those for U.S. crude reached November peaks as hedge funds abandoned some of their very bearish views on oil.
Technical analysts said the oil rally could be
nearing exhaustion at $40. Others said the global crude market remained oversupplied by around 2 million barrels per day, while higher prices raised the prospect of U.S. shale oil producers adding more drilling rigs after recent cutbacks. http://mobile.reuters.com/article/newsOne/idUSKCN0W9045 |
| Re: Oil Hits 2016 High Above $40; Glut Warnings Resurface by Lesgupnigeria(m): 9:22pm On Mar 07, 2016 |
Agriculture is the way.oil not attractive any longer.
Do agric....it pays |
