US crude oil prices rose above $50 per barrel on Monday and were near last week's multi-month highs as the number of US rigs drilling for new production fell and refineries continued to restart after getting knocked out by Hurricane Harvey.
US West Texas Intermediate (WTI) crude futures were trading up 10 cents, or 0.2 per cent, at $49.99 by 0653 GMT, after earlier nudging above the $50 per barrel mark towards the more than three-month high of $50.50 reached last Thursday.
Brent crude futures, the benchmark for oil prices outside the United States, were at $55.66 a barrel, up 4 cents, and also not far from the near five-month high of $55.99 touched on Thursday.
“Demand forecasts from OPEC and IEA ... continued to improve sentiment in the market. Refineries are also reporting a much better recovery from the recent hurricanes,” ANZ bank said on Monday.
Refineries restart
Oil refineries across the Gulf of Mexico and the Caribbean were restarting after being shut due to hurricanes Harvey and Irma, which battered the region over the past three weeks.
Royal Dutch Shell's Deer Park refinery in Texas was among the latest, beginning its restart on Sunday. The plant can process 325,700 barrels per day.
The refinery restarts are occurring “as signs emerge of stalling growth in the US shale industry. The number of rigs drilling for oil in the US fell sharply last week,” ANZ said.
Oil rigs
US energy firms cut seven oil rigs in the week to September 15, bringing the total to 749, the fewest since June, energy services company Baker Hughes had said on Friday.
Despite these signs of a tightening market, analysts warned that distortions from the recent hurricanes made it hard to identify more long-lasting supply and demand fundamentals.
“This week's crude inventories data will almost certainly still show the distortions of Harvey and Irma and significant increases may be looked at by traders as outlier data,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA.
Hedge funds and other money managers cut their bullish bets on US crude futures and options in the week to September 12, the US Commodity Futures Trading Commission reported on Friday.