Oil jumps over 1% on supply disruptions

Oil prices jumped more than 1 percent early on Monday, edging closer to $50-mark, on reports of supply disruptions coming from Nigeria and Venezuela.

Global benchmark Brent crude last traded up 1.4 percent at $48.48 per barrel while WTI rose 1.3 percent to $46.83/bbl.

“Disruptions to oil supply from Nigeria, Venezuela and Libya have all added to the upward pressures on the oil price,” Gary Dugan, chief investment officer at Emirates NBD, said in an investors note on Monday. 

The supply cuts have also led US-based investment bank Goldman Sachs to revise its forecast on oil prices, noting that the “market has likely shifted into deficit,” reversing the oversupply trend from beginning of the year.

“We are pulling forward our price forecast,” Goldman Sachs said about US crude prices. The bank raised its estimates to $50 per barrel for WTI crude in the second half of 2016.

Meanwhile, supply from Nigeria, Africa’s biggest crude producer, remained stunted due to militant attacks and accidents at the country’s oil regions.

Among the latest was an accidental damage at Exxon Mobil Corp’s Qua Iboe facility in south-east Nigeria. The country's output has fallen by as much as 600,000 a day to 1.4 million a day, according to a Bloomberg report.

Attacks have also affected production by Chevron Corp and Royal Dutch Shell, news agencies reported.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com