As the number of U.S. rigs drilling for new production fell and refineries continued to restart after getting knocks by Hurricane Harvey, global oil prices strengthened on the rise to $56 on Monday trading.
Analysts say the development is good for Nigeria as production is stabilizing at over 1.8mbpd due to calm in Niger Delta.
Already, U.S. West Texas Intermediate (WTI) crude futures were at 50.0 dollars per barrel at 0547 GMT, and close to the more than three-month high of 50.50 dollars reached last Thursday.
Brent crude futures, benchmark for oil prices outside the United States, were at 55.71 dollars a barrel, up 9 cents and not far from the almost five- month high of 55.99 dollars touched on Thursday. Brent was 56 dollars on Wednesday.
ANZ bank said on Monday that “Demand forecasts from OPEC and IEA… continued to improve sentiment in the market. Refineries are also reporting a much better recovery from the recent hurricanes”.
Royal Dutch Shell’s Deer Park refinery in Texas was among the latest, beginning its restart on Sunday. The plant can process 325,700 barrels per day.
The refinery restarts are occurring “as signs emerge of stalling growth in the U.S. shale industry. The number of rigs drilling for oil in the U.S. fell sharply last week,” ANZ said.
U.S. energy firms cut seven oil rigs in the week to Sept. 15, bringing the total count down to 749, the fewest since June, energy Services Company Baker Hughes said on Friday.