Brent rises to $61, set
for first monthly gain since July
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[February 27, 2015] By
Claire Milhench
LONDON (Reuters) - Crude oil futures
rebounded on Friday and Brent headed for its first monthly gain since
July, helped by strong investor inflows, an improving demand outlook and
supply outages.
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At 6.48 a.m. ET, Brent crude futures were up 92 cents at $60.97 a
barrel, off an earlier high of $61.75. U.S. crude was up 78
cents at $48.95 a barrel. Both contracts tumbled on Thursday, with
U.S. crude falling hardest.
Brent is trading at a premium of about $12 to U.S. crude, which
remains hamstrung by massive inventory builds. This is the widest
spread since January 2014.
"The main event this week has been the widening of the spread
between Brent and WTI (U.S. crude)," Ole Hansen, senior commodity
strategist at Saxo Bank, said. "WTI is still only a few dollars
above the lows, but Brent has lifted off."
Brent is up around 15 percent this month from January's close of
$52.99, on course for its biggest monthly gain since May 2009. U.S.
crude is also set for its first monthly rise in eight, but with a
modest gain of about 1.9 percent.
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Brent is being helped by positive euro zone and Chinese data, plus
supply disruptions in Libya, said Hans van Cleef, energy economist
at ABN Amro.
China's implied oil demand is set to grow by 3 percent this year,
the country's top energy group China National Petroleum Corp said.
Disruptions to production and exports from Libya and Iraq in recent
weeks have contributed to tightness in the physical market in the
Mediterranean, while in the North Sea, Statoil has shut its
Statfjord C platform after discovering cracks in the flare tower.
But analysts at JBC Energy warned that supply-side support could
wane in coming weeks. "Many of the outages that we have witnessed of
late appear bound to come back next month," they said in a note.
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The latest Baker Hughes rig count number will emerge later on
Friday, providing an update on how the U.S. shale industry is
responding to lower oil prices.
But analysts said much of the move up in Brent was speculative and
fundamentals could not explain its relative strength given that the
market remains oversupplied.
"The market is searching for a new balance, or a fair price, as OPEC
would call it," van Cleef said. "We are seeing a lot of speculative
trading and prices can rise or fall 2 or 3 percent on a daily basis
based on nothing."
(Additional reporting by Jane Xie in Singapore; Editing by Dale
Hudson)
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