Oil trades at $50.10/bl on supply cut

Oil is trading at $50.10 per barrel Thursday morning as falling US supply added to speculation the global surplus is easing.

US crude stock piles dropped to the lowest since March but Goldman Sachs says recovery in Nigerian supplies could erase any supply shortages.

Analysts say oil is now headed for the biggest quarterly advance in seven years as falling U.S. supply added to speculation the global surplus is easing.

Futures have risen 29 percent this quarter in New York, the biggest gain since June 2009. U.S. crude stockpiles dropped to the lowest since March and output fell a third week, the Energy Information Administration said Wednesday.

Supply disruptions and falling U.S. output have helped cut a global surplus, sparking a rally of more than 85 percent since prices hit a 12-year low in February.

Both the International Energy Agency and the Organization of Petroleum Exporting Countries forecast this month that the market is heading toward balance as demand growth outpaces supply.

Overnight Goldman Sachs published a report in which it discussed the downside risk to emerging ceasefire in Nigeria’s oil rich Delta.

According to Goldman “a normalization in production, even over several more months, would create downside risk to our $50/bbl 2H16 price forecast as it would bring the global oil market close to balance over that time period.”