- Brent, WTI advance further on Mid-East tensions, lower US rig counts and China stimulus.
- US oil rigs decline for 19th straight week, according to Baker Hughes.
- People’s Bank of China unveils fresh stimulus on Monday.
The price of oil continued to rally on Monday, as Brent crude reached its highest level of the year as Saudi Arabia continued to bomb Houthi targets in Yemen.
Brent crude for June delivery was up 0.5 percent or 33 cents to $64.10 barrel at 11:21 ET. West Texas Intermediate (WTI) advanced 1.9 percent or $1.08 cents to $56.82 a barrel.
Crude oil is enjoying its strongest rally of the year amid signs of rising global demand, fewer US rigs and escalating regional conflict in the Middle East.
On Monday Saudi Arabia put its security forces on high alert for a possible militant attack stemming from the kingdom’s involvement in Yemen. Interior ministry spokesman Mansour Turki said on Monday that the country’s shopping malls or energy installation facilities may be subject to attacks.
Meanwhile, Riyadh’s oil minister Ali al-Naimi said Saudi Arabian oil production would stay near record levels in April. The OPEC kingpin is producing more than 10 million barrels per day. Output rose to 10.3 million barrels per day in March, a record high.
Oil prices were also supported after the People’s Bank of China (PBOC) announced it was cutting reserve requirements for Chinese commercial banks. China is the world’s second largest economy and second biggest consumer of oil.
In the United States, oil production continues to shatter records, with inventory levels surging to 483.7 million barrels in the week ended April 10. However, the buildup was much smaller than forecast at 1.3 million barrels, the Energy Information Administration (EIA) reported.
Falling US rig counts also helped shore up oil prices in early-week trading. US oil rigs declined for a 19th consecutive week to its level since 2010, according to data from Baker Hughes.
Oil prices have risen around 17 percent since the start of April, with Brent crude rising nearly 10 percent last week alone. Long-term, the market is still lop-sided, favouring lower price points amid an abundant supply.