Brent holds gains above $50 as Nigeria militants claim attacks

Brent oil held gains above $50 a barrel as Nigerian militants claimed fresh attacks over the weekend, threatening the country’s efforts to raise output.

September futures rose as much as 0.8 percent in London after the contract advanced 1.3 percent Friday. The Niger Delta Avengers said they attacked five crude-pumping facilities overnight Sunday, dealing a blow to a government effort to enforce a cease-fire. Shale drillers in the U.S. brought back the most oil rigs of any week this year as confidence in a stabilized market prompts talk of expansion.

“Supply disruptions in Nigeria are now becoming an ongoing issue,”  Hong Sung Ki, a Seoul-based commodities analyst at Samsung Futures Inc., said by phone. “Things look better one day and worse the next day, similar to what we are seeing in Libya.”

Brent has recovered about 80 percent since tumbling to a 12-year low in January amid supply disruptions and falling U.S. output. Pledges from central banks halted a rout in global markets following the U.K. decision to leave the European Union, and both the International Energy Agency and OPEC forecast the oil market is heading toward a supply-demand balance.

Brent for September settlement gained as much as 40 cents to $50.75 a barrel on the London-based ICE Futures Europe exchange and traded at $50.61 at 7:55 a.m. London time. The contract advanced 64 cents to $50.35 a barrel on Friday. The global benchmark crude traded at a 69-cent premium to WTI.

Supply Disruptions

West Texas Intermediate for August delivery added as much as 36 cents, or 0.7 percent, to $49.35 a barrel on the New York Mercantile Exchange. Prices climbed 66 cents, or 1.4 percent, to settle at $48.99 on Friday. Total volume traded was about 35 percent below the 100-day average.

The targets of the Niger Delta included Chevron Corp.’s oil wells 7 and 8 and three trunk lines belonging to Nigerian Petroleum Development Corp., according to tweets from an account claiming to represent the militants. Attacks this year helped to cut Nigeria’s monthly oil output to about 1.4 million barrels a day in May, the lowest in almost three decades, according to the IEA.

Rigs targeting crude in the U.S. rose by 11 to 341, Baker Hughes Inc. said on its website Friday. It’s the fourth time in the past five weeks that producers have added the machines. Explorers in the Permian Basin of West Texas, the nation’s busiest oil patch, again led the activity climb by adding 4 for a total of 154 oil rigs working in the region.

~Bloomberg