NEW YORK – Oil surged above US$40 a barrel in Ny for the first time since December as central banks?from the U.S. to Norway signaled they’ll continue to provide economic stimulus to support demand.
A weaker dollar following a Federal Reserve policy decision on Wednesday that indicated two U.S. rate hikes this season instead of four also drew oil buyers using currencies like the euro.
OPEC kingpin Saudi Arabia and non-OPEC producers led by Russia will meet on April 17 in the Qatar capital Doha, increasing the likelihood of the first global supply offer 15 years.
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“The remote possibility that the coordinated supply control effort comes from this meeting, assuming it even happens, has put market bears around the defensive,” said Pete Donovan, broker with Liquidity Energy in Ny.
Oil prices have rallied about Half from 12-year lows because the Organization of the Petroleum Exporting Countries floated the thought of a production freeze, boosting Brent up from around US$27 a barrel and U.S. crude from around US$26.
WTI for April delivery rose US$1.51, or 3.9 pe rcent, to US$39.97 a barrel at 12:27 p.m. on the Ny Mercantile Exchange. Futures touched US$40.06, the highest since Dec. 7.
Brent for May settlement climbed $1.12 to $41.45 a barrel on the London-based ICE Futures Europe exchange.
“For now, the market is remaining well supported, and also the dollar is providing additional support,” said Olivier Jakob, oil analyst at Petromatrix. “It will likely be hard to go back to the lows of the season.”
WTI also briefly traded at a premium to Brent on Thursday, the first time since January, as traders piled in to the U.S. crude market on bets of an uptick in domestic oil exports.
U.S. crude has gained further traction on smaller stockpile builds recently, and surging gasoline consumption.
U.S. crude inventories a week ago climbed to its fifth straight week of record highs but by just 1.3 million barrels, a much smaller build than forecast, government data showed. Gasoline demand rose 6.4 percent over the past a month from the year ago.
Thomson Reuters
