LONDON (Reuters) – Oil rose to a new six-month high above $60 a barrel on Tuesday as unrest in key producer Nigeria and a U.S. refinery outage kindled concerns over oil fundamentals after weeks of equity-led rallies.
U.S. crude for June earlier struck $60.48 a barrel, the highest since mid-November. By 6:40 a.m. EDT it had trimmed gains, trading 73 cents up at $59.76 ahead of its expiry. The more actively traded July contract rose as high as $60.99.
On Monday, U.S. crude rose more than $1 to $60.21, the highest settlement price since November.
North Sea Brent for July also struck a six-month high of $59.65 and was trading 44 cents up at $58.91.
Oil prices have been on an upward trend since mid-April, and have recovered from below $33 in December last year after a plunge from record highs above $147 in July.
“It is a combination of factors of what we have had and concerns over supply, which is adding risk premium to the market,” Oliver Jakob with Petromatrix said.
“In the past few weeks, oil has traded in a strong correlation with equity market without looking much at fundamentals.”
Support also came on Monday from supply disruptions after a fire at a Sunoco refinery, which affected gasoline output, and concerns over Nigeria, Jakob added.
Key African and OPEC producer Nigeria has long suffered from losing part of its oil output and missing export obligations due to insecurity in the oil-rich Niger Delta.
The main militant group said on Monday it would blockade key waterways in the delta to try to prevent crude oil exports after days of military helicopter and gunboat raids on its camps.
In the world’s top consumer the United States, an explosion disrupted output at Sunoco’s refinery in Pennsylvania, pushing U.S. RBOB gasoline to a seven-month high ahead of the peak summer driving season.
Stocks in Europe extended gains on Tuesday, led by banks. .EU Asian shares hit a seven-month high.
Traders will shift their focus to two sets of U.S. weekly oil data later on Tuesday and Wednesday. Analysts expect the data to show falls in crude oil and gasoline inventories by 700,000 barrels and 1.0 million barrels, respectively.
Ahead of the Atlantic hurricane season this year, forecasters said a strong rain storm off the east coast of Florida had the potential to develop into the first named storm.
In the past, strong storms and hurricanes have disrupted oil facilities in the U.S. Gulf area, pushing up oil prices.