Oil futures maintained positive momentum on Thursday, settling at over $46 a barrel after achieving a new six-month record, according to Bloomberg MarketWatch.
Oil prices have seesawed recently due to a myriad of issues including Iran’s efforts to boost production yield, outages causing a decline in global production and a continued dip in crude inventories.
June West Texas Intermediate crude added 47 cents, or 1%, on Thursday, to end trading at $46.70 a barrel on the New York Mercantile Exchange. In earlier trading for the day, crude futures slipped to $45.61 a barrel after Wednesday’s sharp gain of $1.57, or 3.5%. Thursday’s WTI settlement marked the third straight session increase despite erratic trading.
July Brent crude, the global benchmark, tacked on 48 cents, or 1%, on Thursday, closing out at $48.08 a barrel on the London ICE Futures Exchange. This follows Wednesday’s jump of $2.08, or 4.6%.
Around the world, the oil industry has been impacted by the Fort McMurray wildfire in Alberta, Canada as well as a series of attacks on Nigerian oil facilities, faction rivalries in Libya and a change in policy direction and leadership in Saudi Arabia.
“The trading market has limited confidence in any major direction,” said Richard Hastings, macro strategist at Seaport Global Securities. “This has been the pattern for a couple of months.”
The oil market is “still over-supplied, and likely to remain so through 2016, as very strong gains in Iranian supplies (back up towards pre-sanctions levels at an incredible pace) more than offset” continued supply declines from producers outside of the Organization of the Petroleum Exporting Countries, Matthew Parry, senior oil analyst at International Energy Agency, told MarketWatch.
Oil futures rose upon the news released by the U.S. Energy Information Administration on Wednesday which showed a staggering 3.4 million drop in crude stockpiles.
The International Energy Agency said that global oil inventories will experience a “dramatic reduction in the second half of the year on the back of strong demand and falling supply by some major producers,” according to the agency’s monthly report released Thursday. “A series of production outages around the globe have also taken barrels out of the market in recent weeks, providing support to prices,” according to the report.
The IEA indicates that global crude supplies will carry forward in the first half of the year as Iran increases production.
Meanwhile, June natural gas settled at $2.155 per million British thermal units on Thursday, falling 1.8 cents, or 0.8%.
