Oil prices extended Monday’s gains on Tuesday, with Brent futures surging above the $51-level for the first time since October as global supply disruptions continue to boost investor sentiment, lifting prices.
In London, Brent oil for August delivery soared to an intraday peak of $51.30 a barrel, the most in eight months. It settled at $51.11 by 8:35AM ET, up 1.12%, or 56 cents.
Yesterday, international benchmark Brent rallied 1.83%, or 91 cents following reports of a series of new attacks in Nigeria.
Brent prices have gone up in recent weeks as supply disruptions in Africa eased worries over a global oversupply. Brent futures prices have risen by approximately 85% since falling below $30 a barrel in February.
On the New York Mercantile Exchange, crude oil for July delivery gained 0.99%, or 49 cents, to trade higher at $50.18 a barrel after peaking at $50.37, a level last hit on October 9.
U.S. crude futures have bounced back by roughly 80% since plummeting to $26.05 early this year as a decline in U.S. shale production boosted sentiment.
Analysts, however, point out that current prices make drilling cost-efficient again for some companies, which may result in a higher rig count.
Meanwhile, Brent’s premium to the WTI crude contract is at 93 cents a barrel, higher than Monday’s 86 cents.