Oil prices rallied sharply on Thursday after two days of losses as news of deeper industry spending cuts and a sinking U.S. dollar revived buying. U.S. crude closed above $51 a barrel, shaking off a morning dip tied to data showing a potentially record rise in stockpiles at the Cushing, Oklahoma, delivery hub.
Its discount versus Brent crude expanded to around $6.84 a barrel CL-LCO1=R intraday, the widest in five months, as U.S. oil tanks swelled. French energy major Total (TOTF.PA) on Thursday became the latest to announce investment and job cuts following a near-halving of oil prices since June. The chief executive of Shell warned that supply might not be able to keep up with growing demand as companies slash budgets.
“Shell’s CEO had a more bullish take on supply and demand and the weaker dollar also helped support crude,” said Phil Flynn, analyst at Price Futures Group in Chicago. Expiring March Brent futures LCOc1 rose $2.39, or 4.37 percent to settle at $57.05 a barrel following a 3 percent loss on Wednesday.