Crude oil futures rebounded on Friday, with Brent heading for its biggest monthly gain since May 2009, as supply outages in the North Sea and healthy growth in China’s implied oil demand this year supported prices.
A reduction in rig counts and expectation of better oil demand have helped Brent prices rise by around 15 percent so far this month from January’s close of $52.99, according to Reuters. US crude is also on course for its first monthly rise in eight, but with a more modest gain of about 1.9 percent.
China’s implied oil demand is set to grow 3 percent this year, the country’s top energy group China National Petroleum Corp said on Friday, surpassing the International Energy Agency’s forecast of 2.5 percent.
Brent crude rose $1.04 to $61.09 on Friday. US crude was also up 99 cents at $49.16. In Europe, oil prices also got a lift from renewed threats of a gas supply halt from Russia into Ukraine, which could cause disruptions in deliveries to Europe. But analysts doubted the threat had substance.
In the United States, a reduction in rig counts coupled with a slump in upstream investments supported expectations that production could be trimmed going forward.
The active drilling rig count in North Dakota, the country’s No. 2 oil producing state, dropped to 119 on Feb. 26, versus 193 last year, state data showed.
While supplies from Libya increased to 100,000 barrels a day on Thursday, up from 40,000 bpd, Spain’s Repsol said the company has little hope of restarting production there in the short-term citing security problems.
Still, oversupply worries persist and could limit oil gains especially if inventories in the US continue to build until tanks are full.
An anaemic refinery throughput pushed up US crude inventories by 8.4 million barrels last week, a key reason behind Thursday’s hefty slide in oil prices.
