U.S. crude settled above $50 for the first time since June on Thursday, underpinned by news of another informal OPEC meeting on output cuts and a surprise drop in stockpiles, CNBC reports.
U.S. crude futures settled up 61 cents, or 1.2 percent, at $50.44 a barrel, the best closing level since June 9. It rose to a session peak of $50.58 on Thursday.
Earlier in the session, the market pared gains after traders cited energy monitoring service Genscape’s report of a build of nearly 1 million barrels in stockpiles at the Cushing, Oklahoma delivery base for U.S. crude futures during the week to Oct 4.
Technically, both benchmarks have risen too much too soon, with Brent’s Relative Strength Index at 69 and WTI’s at 65 — just below the overbought level of 70.
“It’s really crazy these markets,” said Carsten Fritsch, commodities strategist for Commerzbank in Frankfurt. “Prices rise, regardless of the news flow and any dip is being seen as buying opportunity.”
Oil crashed from above $100 a barrel in mid-2014 to around $26 in February this year from oversupply of up to 2 million bpd and OPEC’s refusal then to cut output. But with the group changing its stance, and U.S. crude stocks down by a surprise 26 million barrels the past five weeks, prices have been on a roll.
A number of OPEC oil ministers plus Russia’s energy minister set to attend an energy conference in Istanbul are expected to meet together informally although they are unlikely to make any new decisions, OPEC sources said.
