Brent crude oil futures dipped slightly on Wednesday but still held above the $60 mark aided by a rise in Saudi crude prices and air strikes on Libyan fields.
In a move seen to suggest steady demand from refiners, the OPEC kingpin increased the official selling prices for oil deliveries to Asia and the United States on Wednesday.
Saudi Arabia increased the price of its April deliveries to Asia by $1.40 and those to the US by $1.
The Premium Times reports that Brent prices, the global benchmark for crude oil closed at a 0.5% low at $60.75 a barrel at the ICE futures exchange in London. At the New York Mercantile Exchange, crude oil prices for April delivery rose by 0.5% or 26 cents to $50.78 a barrel during the Globex trading session.
Brent prices have rallied from the $45 a barrel price they posted in January in spite of the persistence of the factors that caused the drop. Oil prices had halved in the second half of the year amidst weak demand and a global supply
Oil market participants are increasingly voicing their concern over the sustainability of the latest rally in prices especially those of Brent oil.
“The main question is whether oil prices have started to bottom out, or whether it is too soon to make this call. We believe the latter,” ABN Amro told Marketwatch.
“The recent price recovery is driven partly by speculation and nothing in the underlying oil fundamentals has changed in the past few weeks. Oversupply is still an issue, and this caps the upside potential of oil prices in this supply-driven market,”
Air strikes on oilfields in Libya have also help support the rally with fears that the nation would stop exporting oil. The country is currently producing a reported 400 000 barrels a day compared to the 1.5 million barrels a day produced during the Gaddafi era.
To contact the reporter of this story; Jonathan Millet at email@example.com