Oil rose toward $50 a barrel on Wednesday for the first time in seven months, driven by expectations that shrinking supply will help erode any overhang of unwanted crude, particularly after industry data showed a sharp fall in US inventories.
Brent crude futures were up 59 cents at $49.20 a barrel, while US crude futures rose 52 cents to $49.14 a barrel, Reuters reported. A series of outages around the world, such as wildfires in Canada and a spate of violence in Nigeria’s oil-producing region, has helped cut global oil supply by nearly 4 million barrels per day this month. Although these hitches are temporary, they have contributed to a drop in the supply glut that has plagued the market for nearly two years.
“We are definitely moving out of this surplus situation that we’ve been living in since mid-2014. There will still be some time, maybe six months of surplus, but then we’re basically into rebalancing,” SEB head commodities strategist, Bjarne Schieldrop, said.
