Dubai oil futures cross $60 mark for first time in four months

Oil futures in Dubai went above US$60 per barrel for the first time in four months, mainly on further signs of slowdown in US production, although market participants remains wary.

“The oil markets are certainly seeing some more bullish momentum at the moment, but whichever way the price goes from here, I’d expect continued volatility to be a major part of the story,” said Christopher Fix, the chief executive of Dubai Mercantile Exchange.

The DME’s Oman crude futures for June delivery, the regional benchmark, settled on Thursday at $60.22, up $1.94 on the day and nearly 40 per cent above the mid-January low of $43.35 a barrel.

North Sea Brent crude futures also rose sharply and were up $2.12 at $62.24 mid-afternoon UAE time.

The price slump since last summer has come as major economies slowed while US oil output continued its four-year rise to 40-year highs above 9 million barrels per day. Opec has refused to cut production in an effort to force higher-cost barrels off the market, a strategy that is starting to bear fruit.

The US government’s energy watchdog reported on Wednesday that production had fallen back marginally the previous week – by 20,000 bpd to about 9.4 million bpd.

On Thursday, Opec confirmed earlier reports that its members’ production had surged last month by more than 1 million bpd, with Saudi Arabia reporting it increased by nearly 660,000 bpd to 10.3 million bpd. Output in Iraq and Libya also rose sharply despite the fighting in those countries.

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