Singapore: Brent crude prices held near a 4-1/2 month high above $65 a barrel on Monday, supported by concerns about fighting in Yemen disrupting Middle East supplies and signs that US shale output may have started to decline.
The number of active US rigs drilling for oil has fallen for a record 20 weeks in a row to the lowest since 2010, according to Baker Hughes data.
“Support for oil actually came from a lot of positive speculation that oil supply from the US is actually going to drop,” said Shunling Yap, a senior oil analyst at BMI Research.
The US Energy Information Administration’s forecast of a drop in oil output in May from April, the first monthly decline in four years, also supported bullish bets, she added.
Brent edged up 1 cent to $65.29 a barrel by 7:30am after posting its third weekly gain last week and touching a 10 December high of $65.80.
US crude fell 3 cents to $57.12 a barrel after rising for the sixth consecutive week, its longest stretch of gains since the first quarter of 2014.
Fighting in Yemen raged on as Saudi Arabia continued its air strikes against Houthi militia forces in Aden, but there were no fresh moves towards dialogue.
While the Yemen crisis has raised the risk premium for oil, BMI’s Shun said supply from the world’s top exporter Saudi Arabia remained steady and there was no immediate threat to major oil shipping routes in the region.Reuters