Oil approaches US$61 in early Asia trade Friday(Update)


SINGAPORE: Crude oil futures rebounded on Friday, with Brent heading for its biggest monthly gain since May 2009, as supply outages in North Sea and renewed fears of gas supply disruption in Europe supported prices.

A reduction in rig counts and expectations for better oil demand have helped Brent prices rise by more than 14 percent so far this month from January's close of $52.99.

U.S. crude is also on course for its first monthly rise in eight, but with a more modest gain of about 1.3 percent.

Brent crude rose 68 cents to $60.73 a barrel by 2058 ET. U.S. crude was also up 68 cents at $48.85.

Norwegian energy firm Statoil has shut its Statfjord C platform in the North Sea after discovering cracks in the platform's flare tower. The entire Statfjord field, which includes two other platforms, produced about 81,000 barrels of oil equivalents last year.

Elsewhere in Europe, gas supply talks between the European Union, Ukraine and Russia will be held in Brussels on Monday after President Vladimir Putin warned that Russia would halt gas supplies to Ukraine if it did not receive advance payment, raising the possibility of disrupted deliveries to Europe.

In the United States, a reduction in rig counts coupled with a slump in upstream investments supported expectations that production could be trimmed going forward.

The active drilling rig count in North Dakota, the country's No. 2 oil producing state, dropped to 119 on Feb. 26, versus 193 last year, state data showed.

While supplies from Libya increased to 100,000 barrels a day on Thursday, up from 40,000 bpd, Spain's Repsol said the company has little hope of restarting production there in the short-term citing security problems.

Still, oversupply worries persist and could limit oil gains. An anemic refinery throughput pushed up U.S. crude inventories by 8.4 million barrels last week, a key reason behind Thursday's hefty slide. - Reuters

Earlier report

LONDON: Oil edged up on Thursday towards US$62 a barrel as expectation of a coming recovery in global demand countered a further jump in U.S. crude stockpiles which underlined currently ample supplies.


The U.S. government's latest supply report released on Wednesday said domestic crude inventories rose last week to 434.1 million barrels, hitting a seasonal record high for the seventh week.

Brent crude rose 8 cents to $61.71 by 9.46 a.m. ET, after jumping more than 5 percent on Wednesday. U.S. crude fell 96 cents to $50.03 following a more than 3 percent gain in the previous session.

"At present, it would appear that Brent is bottoming out at $60 per barrel," said Carsten Fritsch, analyst at Commerzbank. "The renewed sharp rise in U.S. crude oil stocks ... points to a market that is still oversupplied."

Brimming U.S. crude supplies are increasing the discount at which U.S. crude is trading to Brent. The spread reached $11.81 on Thursday, the widest since January 2014.

Brent collapsed in 2014, falling from $115 reached in June on global oversupply. The decline deepened after the Organization of the Petroleum Exporting Countries (OPEC) chose to defend market share against rival supply sources, rather than cut its own output.

The price has rallied more than 35 percent from a near six-year low of $45.19 reached in January, supported by signs that lower prices are starting to reduce investment in U.S. and other non-OPEC supply.

A growing number of OPEC officials are making cautiously hopeful comments on the demand outlook. This week, Saudi oil minister Ali al-Naimi said demand was growing, while a Gulf OPEC delegate said it would rise more strongly in the second half of 2015.

OPEC officials including Naimi had been making more bearish comments. The Saudi minister was quoted in December as saying OPEC would not cut output even if oil fell to $20.

"No more talk of $20 from al-Naimi," said Olivier Jakob, oil analyst at Petromatrix. "Analysts calling for $20 a barrel oil will be more shy now."- Reuetrs


   

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