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Oil futures hold near 6-mth highs as supply concerns dominate

Published 2016-05-16, 08:32 p/m
© Reuters. Oil futures hold near 6-mth highs as supply concerns dominate
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TOKYO, May 17 (Reuters) - Crude oil futures held near
six-month highs in early Asian trading as the market focused on
supply disruptions that prompted long-time bear Goldman Sachs (NYSE:GS) to
issue a bullish assessment on near-term prices.
Crude futures have rallied for most of the past two weeks
from a combination of Nigerian, Venezuelan and other outages,
declining U.S. production and virtually frozen inflows of
Canadian crude after wildfires in Alberta's oil sands region.

U.S. crude's West Texas Intermediate (WTI) futures CLc1
were up 5 cents at $47.77 a barrel at 0019 GMT. They rose by
$1.51, or 3.3 percent, to end at $47.72 after touching a
six-month high on Monday.
Brent crude futures LCOc1 was down 2 cents at $48.95 a
barrel after rising slightly following the opening of trade. The
contract settled up $1.14, or 2.4 percent, at $48.97 per barrel
on Monday, having risen above $49 earlier in the session.
The supply disruptions triggered a U-turn in the outlook for
the oil market from Goldman Sachs, which had long warned of
global storage hitting capacity and of another oil price crash
to as low as $20 per barrel.
A further bullish note was sounded by the U.S. Energy
Information Administration (EIA) on Monday, when it said shale
oil output is expected to drop in June for the eighth
consecutive month.
Shale output is expected to fall by nearly 113,000 bpd to
4.85 million bpd, as the nearly two-year slump in prices
continues to undermine profitability at drillers, according to
the EIA's drilling productivity report released on Monday.

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