(Market Watch) – Oil futures rebounded sharply Monday, with the U.S. benchmark closing at its highest level in seven weeks on signs of strengthening Asian demand and expectations a preliminary agreement to curb Iran’s nuclear program won’t see the market immediately swamped with more crude.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in May CLK5, +5.70% jumped $3, or 6.1%, to close at $52.14 a barrel. That marked the highest close for a most-active futures contract since Feb. 17.
“The gap between supply and demand is not as wide as people thought it was,” said Paul Crovo, a Philadelphia-based oil analyst at PNC Capital Advisors
US refineries used 15.9 million barrels a day of crude in the week ended March 27, the highest seasonal level in Energy Information Administration data going back to 1989.
Iran and world powers reached a preliminary accord April 2 over its nuclear program. The US and European Union would lift economic sanctions if the International Atomic Energy Agency verifies Iran’s compliance with curbs on its nuclear program
“In the second half of 2015,the trend is more up than down. You’ll start to see more of a demand response to lower oil prices.” – Paul Crovo
People realised that we aren’t going to see a big influx of Iranian oil in the market for at least the next three to six months. The risk reward is poised on the upside,The Saudis raised their prices to Asia and it’s kind of supportive.”