Crude oil futures rebounded on Friday, with Brent heading for its biggest monthly gain since May 2009, as supply outages in the North Sea and healthy growth in China’s implied oil demand this year supported prices.
A reduction in rig counts and expectation of better oil demand have helped Brent prices rise by around 15 percent so far this month from January’s close of $52.99.
U.S. crude is also on course for its first monthly rise in eight, but with a more modest gain of about 1.9 percent.
China’s implied oil demand is set to grow 3 percent this year, the country’s top energy group China National Petroleum Corp said on Friday, surpassing the International Energy Agency’s forecast of 2.5 percent.
Analysts at Phillip Futures also saw indications of improved demand from the Eurozone and Japan.
“If growth continues to remain strong, this would likely mean that crude oil would be rising on increased demand,” the Singapore-based brokerage said in a note on Friday.
Brent crude rose $1.04 to $61.09 a barrel by 0739 GMT. U.S. crude was also up 99 cents at $49.16.
Norwegian energy firm Statoil has shut its Statfjord C platform in the North Sea after discovering cracks in the platform’s flare tower. The entire Statfjord field, which includes two other platforms, produced about 81,000 barrels of oil equivalents last year.
Elsewhere in Europe, oil prices also got a lift from renewed threats of a gas supply halt from Russia into Ukraine, which could cause disruptions in deliveries to Europe. But analysts doubted the threat had substance.
In the United States, a reduction in rig counts coupled with a slump in upstream investments supported expectations that production could be trimmed going forward.
The active drilling rig count in North Dakota, the country’s No. 2 oil producing state, dropped to 119 on Feb. 26, versus 193 last year, state data showed.
“I do think over time there will be lower oil production but that would take time. And investors are pulling that into current prices,” said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo.
Asia is not spared, as the downturn in oil prices is making it harder to attract future investments in Malaysia.
While supplies from Libya increased to 100,000 barrels a day on Thursday, up from 40,000 bpd, Spain’s Repsol said the company has little hope of restarting production there in the short-term citing security problems.
Still, oversupply worries persist and could limit oil gains especially if inventories in the U.S. continue to build until tanks are full, Nunan said.
An anaemic refinery throughput pushed up U.S. crude inventories by 8.4 million barrels last week, a key reason behind Thursday’s hefty slide in oil prices.
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