Oil hits $50 a barrel for first time this year

The international price of crude oil on Thursday went above $50 a barrel for the first time in 2016 as supply disruptions and increased global demand continue to fuel recovery while the price of the Indian basket rose to $46.74 on the previous trading day.

The benchmark UK Brent crude price hit $50.07 a barrel in Asian trade, BBC rported.

The rise followed US data on Thursday showing that oil inventories had fallen, largely due to supply disruptions following fires in Canada.

Brent crude has now risen 80 percent since it hit 13-year lows of below $28 a barrel at the start of the year.

The US West Texas Intermediate was trading higher on Thursday at $49.85 a barrel.

The Indian basket, comprising 73 percent sour-grade Dubai and Oman crudes, and the balance in sweet-grade Brent, rose to $46.74 a barrel on Wednesday, from $45.72 on Tuesday, as per data compiled by the state-run Petroleum Planning and Analysis Cell.

US crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to US department of energy data.

Canada is the biggest supplier to the US and wildfires in the western provinces have knocked out about a million barrels a day.

Talks in recent months between Organisation of Petroleum Exporting Countries (Opec) and Russia about freezing oil production had already helped prices recover.

As per data available, the price of the Opec's basket of 12 crudes fell to $44.02 a barrel on Tuesday, compared to $44.07 on Monday.

While short-term disruptions to oil supplies have also lifted the price, the general context is one of oversupply with higher production from Iran and Saudi Arabia.

Iran has vowed to keep up oil production after the lifting of Western sanctions in January, further fuelling the supply glut.

Demand has also been better than expected from major economies such as China, India and Russia.

--IANS

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