Oil hits eight-month high
on disruptions, Chinese demand
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[June 08, 2016]
By Karolin Schaps
LONDON (Reuters) - Oil prices jumped to
their highest level in eight months on Wednesday, rising for a third
consecutive session on supply disruptions in Nigeria and strong
Chinese demand data.
There was also a larger-than-expected drop in U.S. crude inventories
on Tuesday, indicating an easing of the global supply glut. A weak
dollar, which hit a five-week trough against a basket of currencies
on Wednesday, also boosted prices. [FRX/]
"The market sentiment is positive; the trend and the momentum points
to further gains," said Carsten Fritsch, commodities analyst at
Commerzbank.
Brent crude futures rose to the highest level since last October at
$52.24 a barrel. They were up 67 cents at $52.11 a barrel at 1042
GMT.
U.S. crude futures were up 65 cents to $51.01 a barrel, after
reaching $51.12, their highest since last July.
Supply disruptions caused by a string of attacks by the Niger Delta
Avengers militant group in Nigeria have brought the oil exporter's
production to its lowest level in 20 years.
The group said on Wednesday it had attacked another oil well owned
by U.S. oil group Chevron, adding to assaults on oil infrastructure
owned by Shell and ENI.
Nigerian Oil Minister Emmanuel Ibe Kachikwu said output had dropped
to 1.5-1.6 million barrels per day (bpd), down from 2.2 million at
the start of the year.
At the same time, May trade data on Wednesday showed the biggest
jump in China's crude oil imports in more than six years, adding to
hopes that the economy of the world's second-largest oil consumer
may be stabilising.
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A petro-industrial factory is reflected in a traffic mirror in
Kawasaki near Tokyo December 18, 2014. REUTERS/Thomas Peter
"China's economic activity is not slowing down as much as expected,
which is a support to the market," said Kaname Gokon at brokerage
Okato Shoji.
U.S. government data due on Wednesday will indicate weekly oil stock
levels. Industry data on Tuesday showed U.S. commercial crude
inventories fell by 3.6 million barrels last week.
The U.S. Energy Information Administration (EIA) will issue official
inventory numbers at 1430 GMT.
The dollar fell to its lowest level in five weeks against a basket
of currencies, hurt by waning expectations that the Federal Reserve
will raise interest rates anytime soon.
(Additional reporting by Osamu Tsukimori in Tokyo; editing by Louise
Heavens and Jason Neely)
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