Oil hits a 6-month high near $48 a barrel amidst supply disruptions

Crude oil prices climbed to a six-month high as disruptions in supplies of up to 3.75 million barrels per day (bpd) have wiped off a market glut that pulled down oil prices by as much as over 70 per cent between 2014 and early 2016.

US benchmark West Texas Intermediate (WTI) for June delivery was up as much as 93 cents to $47.14 a barrel on the New York Mercantile Exchange, the highest since 4 November, and was at $47.02 by 10:14 am London time.

Total volume traded was about 2 per cent below the 100-day average. Prices have climbed more than 75 per cent from the February low.

North Sea Brent for July settlement was up as much as $1.07 at $48.90 a barrel on the ICE Futures Europe exchange. The contract declined 25 cents to close at $47.83 on Friday.

The global benchmark crude was at a premium of 96 cents to WTI for July.

Militant attacks and pipeline disruptions have cut Nigerian volumes by at least 30 per cent, its petroleum minister said last week.

Goldman Sachs Group Inc. said the market moved into a deficit earlier than expected, while China's refineries processed crude at record rates.

Futures rose as much as 2 per cent in New York amidst a shift to a deficit following production shortfalls this month and gains in demand, Goldman Sachs said in a report.

The bank also raised its price estimates and projected a return to an output surplus early next year.

Oil prices that fell to 12-year lows earlier this year have rebounded on signs the worldwide glut will ease amid production cuts and lower than expected production surpluses.

The International Energy Agency on Thursday said oil could rebound on robust demand in India and other emerging nations.

Goldman increased its WTI price forecasts for the second quarter through the fourth, while raising its full-year 2016 projection to $44.60 a barrel from $38.40.

China, the world's largest oil consumer, also reduced crude production in April by 5.6 per cent to 16.6 million tonnes, the lowest level since February 2015, according to data from the National Bureau of Statistics.

Chinese refiners, however, increased throughput by 2.4 per cent from a year earlier to about 10.93 million barrels a day last month, data show.

Active rig counts in the US also fell to 318 after 10 were idled last week, taking the total reduction in oil rigs to 1,000 since January 2015.