Oil prices hit US$50 for the first time in 2016

5682163677 f45cf4fb7f zDisruption in production and supply as a result of wildfires in Canada's oil sands and unrest in the Nigerian and Libyan energy sectors have contributed to this trend. (Image source: Mark Iocchelli/Flickr)Oil prices hit US$50 a barrel on Thursday for the first time in seven months owing to supply disruptions and increased global demand

Global oil benchmark, Brent crude, hit US$50.14 per barrel early on Thursday, data from Energy Intelligence showed.

Oil prices are up 89 per cent from when it hit a 13-year low of below US$28 a barrel in February. Wildfires in Canada's oil sands, disruption in production and supply in the Nigerian and Libyan energy sectors owing to political unrest, and a near economic meltdown in OPEC member Venezuela have reduced immediate production by nearly 4mn bpd, leading to a rise in buying in crude futures.

Brent and US crude's West Texas Intermediate (WTI) futures have risen nearly 90 per cent from 12-year lows hit this winter, recouping about half of what they lost since mid-2014 when both traded at above US$100 a barrel, Reuters reports.

Since hitting the US$50 mark, the oil price has fallen as investors raised concerns that robust price gains may lead to more output and further add to the global glut. On Friday, US crude oil for July delivery fell 8 cents to settle at US$49.48 a barrel on the New York Mercantile Exchange. Brent crude lost 15 cents or 0.3 per cent to US$49.59 a barrel on ICE Futures Europe. 

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