SINGAPORE – US oil futures held above $50 per barrel yesterday as the entire crude forward curve pushed above that level in a sign that financial markets have increasing confidence in the sector.
US West Texas Intermediate (WTI) futures CLc1 were up 3 cents at $50.47 per barrel yesterday. They settled at $50.44 per barrel on Thursday - the first settlement above $50 since late June.
Brent futures LCOc1 already moved over $50 at the start of this week, and were trading 4 cents up at $52.55 per barrel.
With both front-month contracts above $50 per barrel and each forward curve in contango, in which contracts for future delivery are more expensive than those for immediate sale, the entire crude futures complex has moved back over $50 per barrel.
“There is still no end in sight for the current bullish run. Speculators have been buying every short-term dip, a strategy that has evidently been working very well so far,” said Fawad Razaqzada, market analyst at futures brokerage Forex.com.
“This trend could well continue for some yet as after all crude oil’s fundamental outlook continues to improve, as well as the planned Organisation of the Petroleum Exporting Countries (OPEC) oil output cut, we have seen surprise inventory destocking in the US for five straight weeks now. Consequently, US oil stocks have now fallen below 500 million barrels for the first time since January,” he added.
OPEC plans to agree on a coordinated production cut when it next meets in late November, in a bid to rein in a global fuel supply overhang that has dogged prices for the last two years.