Oil closed up after a weak start on Tuesday, with Brent crude rising to a 2015 high of $63 a barrel as short-covering returned to a market depressed earlier by worries about euro zone stability. Threats to Middle East crude production and the falling U.S. oil rig count seemed to spur market bulls despite global inventory data suggesting an oversupply of up to 2 million barrels per day, analysts and traders said.
“We’re in this mode where the market continues to discount bearish news,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York. “Certainly there is some positive news out there about Libya and rest of the Middle East, but I don’t see anything that’s overly bullish.” Options for the front-month March contract in U.S. crude oil also expired on Tuesday, possibly adding to the rebound, brokers said. A similar upward move was observed a month ago when options expired in the previous front-month contract for U.S. crude.
Brent oil’s front-month contract for April delivery LCOc1 settled up $1.13 at $62.53 a barrel, rebounding from the day’s low of $60.27. The session peak of $63 was the highest since Dec. 18. U.S. crude futures for March CLc1 closed up 75 cents at $53.53, versus an intraday low at $50.81.
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