Oil Rises Anew on Continued Disruption in Production

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Brent crude oil commodity price growth. Word cloud illustration

Oil prices in European markets jumped to new seven-month highs on Tuesday, adding to yesterday’s gains amid lingering global supply disruptions in several oil exporting countries.

Oil prices have risen in recent sessions due to a combination of production outages in Nigeria, Libyan and Venezuela, limited Canadian output as a result of fires in Alberta and declining U.S. shale output.

Crude oil for June delivery in New York rose to a session peak of $48.42 a barrel, the highest since October 13. It traded at $48.30 by 07:50 GMT, up 1.2%, or $0.58.

On Monday, oil futures in New York tacked on 3.27%, or $1.51 after Goldman Sachs (NYSE:GS) released a note saying the market shifted into deficit this month due to declining production.

Nymex oil have recovered nearly 80% since plummeting to $26.05 on February 11, the lowest in 13 years, as a decline in U.S. shale output helped improve investor sentiment.

The U.S. Energy Information Administration (EIA) said Monday that it expects shale oil production to fall in June for the eighth straight month, dropping by nearly 113,000 barrels per day to 4.85 million.

Elsewhere, Brent oil for July delivery climbed to a session high of $49.47 a barrel, a level last seen November 4, before paring some gains to trade at $49.37, up 0.82%, or $0.40.

On Monday, Brent futures added 2.38%, or $1.14.

Brent futures prices have gone up by about 85% since briefly plunging below $30 a barrel in mid-February, despite the failure of talks among OPEC and Non-OPEC producers at a summit in Doha last month.

OPEC is slated to meet again on June 2 in Vienna, and may include the production freeze initiative in its agenda.

Meanwhile, Brent’s premium to the WTI crude contract went down to $1.07 a barrel, from yesterday’s close of $1.25.

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