Oil surged above $50 a barrel in New York for the first time since July on speculation that demand is picking up.
West Texas Intermediate futures rose as much as 4.7 percent. A “new capital discipline” in the industry will allow demand to catch up with supplies, boosting prices, according to Gary Ross, founder and chairman of PIRA Energy Group. Demand will climb more this year than previously projected amid cheaper fuel prices, OPEC Secretary-General Abdalla Salem El-Badri said yesterday in a statement to the International Monetary Fund.
Oil has traded below $50 a barrel after prices slumped to a six-year low in August amid speculation a global glut will persist through next year. U.S. stockpiles remain about 100 million barrels above the five-year average and the Organization of Petroleum Exporting Countries continues to pump more than its quota.
WTI for November delivery rose $1.62 to settle at $49.43 a barrel on the New York Mercantile Exchange after touching $50.07. Brent for November settlement advanced $1.85 to $53.18at 2:42 p.m. on the London-based ICE Futures Europe exchange.