Oil Up 1% After Swing on Mixed Data; US Crude at November Highs
NEW YORK, May 12 (Reuters) - Oil prices rose 1 percent in volatile trade on Thursday, with U.S. crude hitting six-month highs as investors weighed a forecast for tighter global supplies against signs of another storage build at the hub for U.S. crude futures. Worries of a major outage in Nigerian crude also boosted the market, some traders said.
"It was a mixed bag, with both longs and shorts trying to defend positions based on the data that appealed most to them. The bulls prevailed," said Phil Flynn, analyst at the Price Futures Group in Chicago.
Brent crude futures settled up 48 cents at $48.08 per barrel. U.S. crude's West Texas Intermediate (WTI) futures rose 47 cents to settle at $46.70. It hit a six-month high of $47.02. With that, Brent was on track for a weekly rise of 6 percent and WTI 4 percent, continuing a broad uptrend that has added about $20 to a barrel from lows in January and February.
WTI could advance to almost $51 in the near-term "on pure technical merits," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
"But from a longer-term perspective, we still see this market setting up for a hard fall next month" from a potential dollar rally or weak Chinese economic data, he added. WTI initially rallied early, after the International Energy Agency raised its 2016 global oil demand growth forecast to 1.2 million barrels per day (bpd) from 1.16 million in April.
Brent also jumped as the IEA noted a combined decline of 450,000 bpd in Nigerian, Libyan and Venezuelan output from a year ago. Prices then slid on data from market intelligence firm Genscape that showed a stockpile build of 548,923 barrels at the Cushing, Okla. delivery hub for WTI futures during the week to May 10.
Cushing is one of the most closely watched datapoints for WTI. Some traders said a stronger dollar also pressured oil. The dollar rose about 0.3 percent against a basket of currencies, making greenback-denominated oil more expensive to holders of other currencies. But oil prices rebounded late and settled up.
Some traders cited reduced production in Nigeria's benchmark Qua Iboe crude. Nigeria is Africa's largest oil producer and Qua Iboe the largest crude grade, set to account for 317,000 bpd of exports in June. It was not immediately clear by how much of the output was reduced by the pipeline problem.
(Additional reporting by Sarah McFarlane in LONDON, Henning Gloystein in SINGAPORE and Osamu Tsukimori in TOKYO; Editing by David Evans and David Gregorio)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.