Brent on track for highest settle since October

Oil resumed its upward march on Monday as supply disruptions continue to give crude a boost.

Brent crude, the global oil marker, advanced 2 per cent to $50.74 a barrel — if it holds on to these gains, it is poised to settle at its highest level since October.

Meanwhile, West Texas Intermediate, the US oil marker, rose 2.1 per cent to $49.64 — and was poised for its highest close since July.

Crude prices first breached the $50 a barrel level last week ahead of a meeting of Opec members in Vienna. But Saudi Arabia-led Opec did little to help crude prices as the meeting ended without an output ceiling for the group, as expected, however Saudi’s new oil minister Khalid al-Falih said that the group should encourage a rebalancing of the oil market.

Oil’s recent gains come on the back of supply disruptions in Nigeria, Libya and Canada. Attacks by a new militant group that goes by the name the Niger Delta Avengers has seen output from Nigeria fall to the lowest level in more than two decades. Just last week the militants said they were responsible for an attack hitting two Chevron oil wells.

While some analysts argue that a rebalancing could be in the works, others worry that a rise in crude prices could prompt US producers to bring more rigs online, adding to the supply glut and ending the nascent rally in crude.

Brent is now 56 per cent lower than it was in mid-2014 when oil first began its protracted decline. Meanwhile, WTI is off 53 per cent over the same period.