Oil price goes above $50 a barrel for first time in 2016

PanARMENIAN.Net - The price of oil has gone above $50 a barrel for the first time in 2016 as supply disruptions and increased global demand continue to fuel a recovery, BBC News reports.

Benchmark Brent crude hit $50.22 per barrel at one stage on Thursday, May 26 its highest level since early November.

The rise followed U.S. data showing that oil inventories had fallen after supply disruptions due to fires in Canada.

Brent crude has now risen 80% since it hit 13-year lows of below $28 a barrel at the start of the year.

U.S. crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to U.S. Department of Energy data.

Canada is the biggest supplier to the U.S. and wildfires in the western provinces have reduced supplies by about a million barrels per day.

Talks in recent months between Opec and Russia about freezing oil production had already encouraged a price rise.

Short-term disruptions to oil supplies have also lifted the price, offsetting higher production from Iran and Saudi Arabia.

As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.

Demand has also been better than expected from major economies such as China, India and Russia.

Michael Hewson, chief market analyst at CMC Markets, said: "We do now appear to be seeing the effects that the decline in U.S. output is having, and while supplies remain elevated, the glut does now appear to be diminishing."