Oil is above $50 for the first time in nearly six months as supplies drop

US inventories decline by 4.23 million barrels

Brent has surged about 80 per cent since dropping to the lowest since 2003 in January on signs the global oversupply will ease (Corbis)

Brent crude rose above $50 (£34) a barrel for the first time in more than six months as a drop in US stockpiles accelerated a rebound from a 12-year low after global disruptions trimmed the market’s glut.

Futures rose as much as 0.8 per cent in London to the highest intraday price since 4 November, after climbing 2.9 per cent the previous two sessions.

US inventories slid by 4.23 million barrels last week, exceeding an expected drop of 2 million.

Attacks in Nigeria have cut production to a 20-year low and Venezuela is struggling to maintain output amid power cuts, while producers in Canada are beginning to restart oil-sands operations halted by wildfires.

Brent has surged about 80 per cent since dropping to the lowest since 2003 in January on signs the global oversupply will ease.

The final preparatory gathering of officals from the Organisation of Petroleum Exporting Countries (OPEC) before a ministerial meeting next week did not include discussions on limiting output, signaling the group will stick with its strategy of defending market share.

“The immediate driver is a good draw on US crude stockpiles, helping to nudge the price up a bit further,” said Ric Spooner, a chief analyst at CMC Markets in Sydney.


 Oil prices reached a six-month high amid volatility in Nigeria, Venezuela and Canada 
 (Bloomberg)

“The market hasn’t had any bad news to knock it off its perch but the price is likely to struggle if it gets into the $50s. There is still quite a bit of inventory around.”

Brent for the July settlement climbed as much as 40 cents to $50.14 a barrel on the London-based ICE Futures Europe exchange and was at $50.10 in Hong Kong. The contract increased $1.13 to $49.74 on Wednesday. The global benchmark crude was at a premium of 22 cents to West Texas Intermediate (WTI), the US marker grade.

WTI for the July delivery climbed as much as 37 cents to $49.93 a barrel on the New York Mercantile Exchange.

The contract gained 94 cents to $49.56 on Wednesday. Total volume traded was about 32 per cent below the 100-day average. Prices are up about 90 per cent from a February low.

US crude production dropped for an 11th week to 8.77 million barrels a day, the lowest level since September 2014, the Energy Information Administration reported on Wednesday. Stockpiles at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, fell by 649,000 barrels.