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Oil at 6-month high, edging towards $50
Oil prices rose to the highest level in six months, moving closer to the key $50-a-barrel mark for the first time since November. Mounting concerns over supply helped lift oil prices, while a more bullish outlook from Goldman Sachs also helped.
Supply disruptions due to events in major oil producing countries like Nigeria and Canada recently have put pressure on prices.
In Nigeria, militant threats to production in the country are causing concern since Nigeria is a key OPEC producer. Output levels are at their lowest in decades. On Monday Nigerian oil minister said output had fallen by 800,000 barrels a day to 1.4m barrels.
Meanwhile the wildfires in Canada’s oil sands near Fort McMurray also disrupted production. Yesterday, about 8,000 oil sands workers in camps north of Fort McMurray have been forced to evacuate once again.
The perception of diminished supply and strengthening demand was enough to prompt analysts at Goldman Sachs, arguably the most influential bank in commodity markets, to lift their forecast for WTI. It now thinks the US benchmark will average $45 per barrel during the second quarter, up from an earlier estimate of $35 in March.
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