As well as increased demand, especially from China, Turkey's threat to disrupt oil flows from Iraq's Kurdistan region, helped push up prices on Monday. About a half million barrels of oil per day moves from a pipeline in the Kurdish region to a Turkish sea port and a frustrated Ankara reminded the Kurdish government that it was the one that controlled the tap.
He also suggested that OPEC's relationship with Russian Federation is showing signs of strain, with the former Soviet Union's cutback compliance "well short of what was promised" and various officials pegging oil prices next year at an anemic $40-$43 per barrel.
Investigations showed that the price of oil may stabilise in excess of $55 per barrel in the fourth quarter, especially as many stakeholders, particularly Russia, Azerbaijan, Brunei and Sudan, have chose to support the efforts of OPEC in achieving stability.
Brent crude oil prices have jumped to their highest level in eight months following a meeting of the Organisation of the Petroleum Exporting Countries (Opec) at which producers said the market was rebalancing.
The front-month in USA crude's West Texas Intermediate (WTI) futures was up $0.08, or 0.2%, at $50.63 a barrel on the New York Mercantile Exchange. The jury is out, and speculation's rising about what OPEC would or should do after the production cut deal expires after its current deadline in March 2018. Add to that the latest figures from Britain-based Oil Movements that show the volume of crude oil in transit on tankers falling to the lowest in records going back to April 2015, along with the growing sense that physical crude markets are tightening. Emerging sentiment about balance, following years of oversupply, has been supportive of crude oil prices during recent sessions.
"Nigeria is ready to reduce production at the level of 1 mln 800 thousand barrels per day and join the agreement once it reaches the target".
Oil prices are recovering.
Caught on the wrong side of the rally are bearish traders who believed US drillers would just ramp up production once prices rose over $50.00, but that is not likely to be the case.
Despite strong fuel demand and soaring Brent prices, United States crude futures have risen much less, widening their discount against Brent to its widest since August 2015. That rally pushed the USA oil benchmark, WTI, up to more than $52 per barrel, while the global benchmark, Brent, rose above $59 per barrel.
Crude inventories rose for a third straight week, building by 4.6 million barrels, about a million more barrels than forecast.
"The oil market structure has finally switched from Contango to backwardation, a condition that has eluded the market since its collapse in the fall of 2014".