U.S. Oil Rises to $60 for First Time This Year as Glut Recedes

Oil rose to $60 a barrel in New York for the first time since December, extending the biggest monthly advance since May 2009 on signs the U.S. supply glut is easing.

Futures rose as much as 2.1 percent in New York after gaining 25 percent in April. Crude stockpiles at Cushing, Oklahoma, the biggest U.S. oil-storage hub, last week shrank for the first time since November, according to government data. EOG Resources Inc., the biggest shale-oil producer, said it lost money in the first quarter after taking steps to halt output growth following the slump in prices.

Oil has rebounded from a six-year low reached in March as U.S. drillers cut the number of operational oil rigs to the fewest since 2010, adding to signs that the surplus may decline. U.S. crude stockpiles are still at the highest in 85 years, raising speculation the rally may falter.

“Round numbers are always to be watched,” Olivier Jakob, managing director at Petromatrix GmbH said by e-mail from Zug, Switzerland. “U.S. markets are getting excited about any hints of lower production or stock draws in Cushing. U.S. crude oil production hasn’t yet started to decline but crude oil prices have already risen.”

West Texas Intermediate for June delivery was at $60.13 a barrel in electronic trading on the New York Mercantile Exchange, up $1.20, at 8:11 a.m. New York time. It gained as much as $1.22 to $60.15 a barrel. The volume of all futures traded was 35 percent below the 100-day average for the time of day. Prices climbed 13 percent this year.


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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.