Oil Rises on Supply Outages As Brent Crude Hits $49.25/barrel

Oil futures rose for a second straight session on Tuesday, May 17, as U.S. crude hit a six-month high.

The extended gain came as the market focused on supply disruptions that prompted long-time bear Goldman Sachs to issue a bullish assessment on near-term prices.

Oil prices have rallied for most of the past two weeks due to a combination of Nigerian, Venezuelan and other outages, declining U.S. output and virtually frozen inflows of Canadian crude after fires in Alberta’s oil sands region.

U.S. West Texas Intermediate (WTI) futures were up 50 cents at $48.22 a barrel at 0306 GMT. They hit $48.28 earlier in the session, the highest since November.

Brent crude futures were up 28 cents at $49.25 a barrel, near six-month highs of $49.47 reached on Monday.

“The increasing intensity in supply-side disruptions in the oil market should see prices well supported in the short term,” ANZ said in a research note. The disruptions triggered a U-turn in the outlook for the oil market from Goldman Sachs.

The U.S. bank, which had long warned of global storage hitting capacity and of another oil price crash to as low as $20, now sees U.S. crude trading as high as $50 in the second half of 2016.