Oil is set for the longest run of monthly gains in five years as output disruptions from Nigeria to Canada reduce supply before OPEC meets Thursday in Vienna to discuss production policy.
Futures were little changed in New York from the Friday close, set for a fourth monthly advance. Militant attacks have cut Nigerian supply to the lowest level in more than two decades while Canadian output fell amid wildfires. Producers are starting to resume operations after the blaze eased. Libya’s Petroleum Facilities Guard captured a town near the Es Sider and Ras Lanuf oil-loading terminals after fierce clashes with Islamic State militants.
Oil has surged more than 85 percent since slumping to a 12-year low in February on signs the worldwide surplus is easing amid declining production from the U.S. to Nigeria. The Organization of Petroleum Exporting Countries is unlikely to reach any agreement to limit output when it meets June 2 as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg.
“It’s difficult to see Saudi giving much in terms of the supply situation and clearly Iran’s not going to step back,” Robert Rennie, the global head of currency and commodity strategy at Westpac Banking Corp. in Sydney, said in a Bloomberg Television interview. “Beyond $50, I think crude starts to struggle. It looks like the Canadian production should start to pick up.”
West Texas Intermediate for July delivery was at $49.55 a barrel on the New York Mercantile Exchange, up 22 cents, at 12:21 p.m. Hong Kong time. There was no settlement Monday because of the U.S. Memorial Day holiday. Trades will be booked Tuesday for settlement purposes. Prices are up 7.9 percent this month for the longest run of monthly gains since April 2011.
Brent for July settlement, which expires Tuesday, lost 11 cents to $49.65 a barrel on the London-based ICE Futures Europe exchange after rising 0.9 percent Monday. Prices are set for a fourth monthly increase, also the longest streak since 2011. The more-active August contract slipped 13 cents to $50.23. The global benchmark traded at a premium of 11 cents to WTI for July.
For a column on what to expect from the OPEC meeting, click here.
Libyan forces took control of the town of Bin Jawad after clashes during which five petroleum guards were killed and 16 others wounded, PFG spokesman Ali al-Hasy said by phone. The nation is the smallest OPEC producer, pumping about 310,000 barrels a day.
Prices may climb to $60 a barrel or more this summer, United Arab Emirates Economy Minister Sultan Bin Saeed Al Mansoori said at a conference. Delphi Energy Corp. fell the most in almost 14 years after lenders cut the Canadian oil and gas producer’s credit facility for the second time since December.