Oil price rallies to 2015 high

NEW YORK: Crude oil prices jumped to fresh 2015 peaks on Thursday, turning higher on news that terrorists took control of a major southern oil terminal in Yemen.
The terminal is one of the major hubs for the Hadramout region exporting an average of 120,000 to 140,000 barrels per day (bpd) of crude from fields in the area.
Brent crude for June delivery was up $1.18 at $64.50 a barrel at 2:10 p.m. EDT (1810 GMT), rallying from a $62.00 low and reaching a 2015 peak for front-month Brent of $64.95.
US May crude rose 64 cents to $57.03, hitting a 2015 high of $57.42 after recovering from a $55.07 intraday low.
Brent’s premium to US crude was back above $5 a barrel, now comparing June contracts, after the spread narrowed to $3.34 intraday on Wednesday.
The dollar’s weakness also provided some lift for dollar-denominated crude oil prices.
Oil prices pulled back earlier when OPEC said that its own output rose in March, even as low prices start to weigh on US production.
OPEC’s monthly oil market report confirmed industry estimates of a surge in OPEC production in March, which jumped by 810,000 bpd — 10 times the increase in 2015 demand for OPEC crude — led by record output in Saudi Arabia and higher Iraqi exports.
“The strategy of OPEC to put pressure on the high-cost producers is working, but the individual members seem to have moved off of that focus and are instead producing as much as they can,” said Jamie Webster, analyst at IHS in Washington and an OPEC expert.
“OPEC’s strong production growth points out that they still have the capacity and willingness to swing up — unfortunately the global market doesn’t require it at this time.”
Crude futures surged on Wednesday, with US crude up nearly 6 percent, following government data showing the smallest weekly inventory build since the week ending Jan. 2, suggesting that months of oversupply may be starting to ease.
Wednesday’s bearish data showing the small build in US crude oil stocks followed reports indicating production in the US, including in shale play powerhouse North Dakota, was beginning to pull back as the price retreat since June weighs on producers.
Talks between OPEC and other major producers triggered speculation about deals to cut production and supported oil prices on Wednesday, though most analysts said an agreement was unlikely.
Reuters technical analyst Wang Tao told Reuters Global Oil Forum that Brent could rise toward $70 a barrel in the near term, but that a sharp downturn could happen after that.