* Goldman Sachs (NYSE:GS) says market likely flipping into deficit
* Cushing stockpile build pares gains
* Libyan port to resume oil exports after earlier blockade
* Exxon Mobil seen ramping up Nigeria's Qua Iboe crude
output
* Venezuela strikes sweeter oil-for-loans deal with China
(Updates to market settlements)
By Barani Krishnan and Dmitry Zhdannikov
NEW YORK/LONDON, May 16 (Reuters) - Oil prices hit six-month
highs on Monday on worries about global supply outages and as
long-time bear Goldman Sachs sounded more positive on the
market, although a stockpile build at the U.S. storage hub for
crude futures limited gains.
Expectations of resumption in oil exports from a Libyan
port, a ramp up in Nigerian crude production by Exxon Mobil Corp (NYSE:XOM)
XOM.N and an improved oil-for-loans deal reached by Venezuela
with China furthered the tempered the bullish theme in oil.
Brent crude futures LCOc1 settled up $1.14, or 2.4
percent, at $48.97 per barrel. It rallied to $49.47 earlier, its
highest since early November, in a test towards $50.
U.S. crude's West Texas Intermediate (WTI) futures CLc1
rose by $1.51, or 3.3 percent, to end at $47.72 after touching a
six-month high at $47.85. WTI saw a flurry of late buying, with
more than 13,600 lots changing hands in the final minute,
according to Reuters data, in an attempt to test $48.
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.
The 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.
"The oil market has gone from nearing storage saturation to
being in deficit much earlier than we expected," said Goldman,
which added that supply likely shifted into a deficit in
May.
But some of Monday's bullish sentiment took a back seat when
market intelligence firm Genscape reported a stockpile build of
694,176 barrels at the Cushing, Oklahoma delivery point for WTI
futures. The build surprised some market participants expecting
a stock decline in Cushing due to the shuttered Canadian output.
Elsewhere, Exxon Mobil was expected to ramp up its
production of Nigeria's Qua Iboe crude while Libya's port of
Hariga was slated to resume blocked crude
shipments.
Venezuela also reached a deal with China to improve
conditions in an oil-for-loans deal that gives the OPEC member
breathing room ahead of heavy debt payment.
While Goldman sounded more positive on the market than
before, it also cautioned that at around $50 a barrel, supply
could flip back into a surplus in the first half of 2017 if
exploration and production activity picked up.