Brent Crude Hits Five-Month High At $46
The international oil benchmark, Brent crude, nudged up on Monday, posting its fifth straight monthly gain, as global stimulus measures underpin prices even as demand struggles to return to pre-COVID levels in a well-supplied market.
Brent crude futures for November climbed 27 cents, or 0.6 per cent, to $46.08 a barrel by 0038 GMT, while US West Texas Intermediate crude was at $43.11 a barrel, up 14 cents, or 0.3 per cent, according to Reuters.
Brent, against which Nigeria’s oil is priced, stood at $45.63 per barrel as of 9:05pm Nigerian time. It peaked at $46.23 a barrel on August 5, the highest level since March.
Oil markets largely shrugged off the hurricane’s impact on Friday as energy companies continued efforts to restore operations at US Gulf Coast offshore platforms and refineries shut before the storm.
A weak US dollar has supported oil prices even though fuel demand has struggled to recover amid the coronavirus pandemic and supplies remain excessive, although crude may face hurdles going forward, analysts said.
“We believe that the impact of a cheaper dollar from current levels will see a minimal impact on crude purchases, irrespective of slightly more favorable crude pricing,” RBC Capital’s Mike Tran said in an August 27 note.
“The relationship between demand and price elasticity is blunted in the current environment, because oil is already cheap and readily available and there currently exist a dearth of buyers.”
China’s crude imports in September are set to fall for the first time in five months as record volumes of crude are stored in and outside of the world’s largest importer, data from Refinitiv and Vortexa showed.
Reflecting concerns about rising supplies and sluggish global economic recovery, hedge funds and money managers cut bullish wagers on US crude to the lowest level in nearly four months, data showed on Friday.
Higher oil and gas prices are also encouraging US producers to resume drilling as the country’s oil and gas rig count rose by three to 254 in August, according to data from energy services firm Baker Hughes Co.
Separately, Saudi Aramco discovered two new oil and gas fields in the northern regions, the kingdom’s energy minister said on Sunday, state news agency SPA reported.