U.S. crude prices hit their highest level in eight months on Wednesday, buoyed by strong Chinese demand data and ongoing supply disruptions in Nigeria.
Brent crude futures increased to $52.24 a barrel on Wednesday, the highest level since last October. This is the third consecutive session for crude to see a rise in its prices.
On Tuesday, US crude inventories experienced a larger-than-expected drop, suggesting an easing of the global supply glut. A weak dollar also helped boost crude prices.
“The market sentiment is positive; the trend and the momentum points to further gains,” said Carsten Fritsch, commodities analyst at Commerzbank.
U.S. crude futures also increased to $51.05 a barrel (up 69 cents), after reaching $51.12, their highest since last July.
In Nigeria, a series of attacks by the Niger Delta Avengers militant group has caused serious supply disruptions in the country, thus bringing the oil exporter’s production to its lowest level in 20 years.
On Wednesday, the group announced that it had attacked another oil well which is owned by U.S. oil group Chevron.
According to Nigerian Oil Minister Emmanuel Ibe Kachikwu, the output had decreased to 1.5-1.6 million bpd from 2.2 million barrels per day (bpd) at the start of the year.
May trade data released on Wednesday also revealed the biggest rise Chinese crude oil imports in more than six years
“China’s economic activity is not slowing down as much as expected, which is a support to the market,” said Kaname Gokon at brokerage Okato Shoji.
U.S. government data to be released on Wednesday will indicate weekly oil stock levels, but industry data released on Tuesday showed a drop of in U.S. commercial crude inventories by 3.6 million barrels last week.
Earlier, the US dollar dipped to its lowest level in five weeks against several currencies, hurt by fading expectations that the Federal Reserve will increase interest rates anytime soon.
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