Investing.com – Brent oil futures held near the highest level since December on Monday, amid ongoing concerns over the security of Middle East oil shipments.
On the ICE Futures Exchange in London, Brent oil for June delivery tacked on 10 cents, or 0.15%, to trade at $65.38 a barrel during European morning hours.
On Friday, London-traded Brent futures rallied to $65.80, the most since December 10, before ending at $65.28, up 43 cents, or 0.66%. Brent prices rose $1.43, or 2.88%, last week, the third straight weekly advance.
Saudi Arabia resumed its air strike campaign against Iran-backed Houthi rebels in Yemen, renewing concerns over the security of Middle East oil shipments.
Yemen is strategically located on the Bab el-Mandeb, a strait that connects the Gulf of Aden with the Red Sea.
Approximately 3.8 million barrel per day of crude and oil products flow through the strait.
Brent futures are up more than 16% so far in April as some investors bet that a bottom had been reached after a nine-month long rout. But prices are still down approximately 43% since June, when futures climbed near $116.
Elsewhere, on the New York Mercantile Exchange, crude oil for June delivery dipped 1 cent, or 0.01%, to trade at $57.15 a barrel. Nymex oil prices shed 59 cents, or 1.02%, on Friday to settle at $57.15.
New York-traded oil prices declined 60 cents, or 0.3%, last week, halting four straight weeks of gains.
U.S. oil futures have risen almost 16% in April due to mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months amid an ongoing collapse in rigs drilling for oil.
Industry research group Baker Hughes (NYSE:BHI) said late Friday that the number of rigs drilling for oil in the U.S. fell by 31 last week to 703, the lowest since October 2010. It was the 20th straight week of declines.
Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
Meanwhile, the spread between the Brent and the WTI crude contracts stood at $8.23 a barrel, compared to $8.13 by close of trade on Friday.
Elsewhere, the dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.2% to trade at 97.26 early on Monday, moving off the previous session’s three-week low of 96.90.
The index ended the week down 0.62%, the second straight weekly drop, as a recent run of disappointing economic data dampened optimism over the economic recovery, fuelling speculation the Federal Reserve could delay hiking interest rates until late 2015, instead of tightening midyear.
Market players will focus on the conclusion of the Fed’s two-day monetary policy meeting on Wednesday, which could provide indications on how soon it might raise interest rates.
Meanwhile, concerns over the lack of an agreement on economic reforms for bailout funds between Greece and its creditors remained in focus.
The Greek government is no closer to reaching an agreement with its international creditors over economic reforms required to access remaining bailout funds.
Athens must pay €780 million due to the International Monetary Fund on May 12, fuelling fears that the country could default on its debt be forced out of the euro zone.
Source: Investing.com
