Oil Prices Hit 8-Month High

Brent crude futures were up 67 cents on the day at $51.22 a barrel by 1135 GMT, having hit an intraday peak of $51.29 earlier on Tuesday, their highest in almost a year.

The prices were buoyed after last month’s wildfires in Canada’s oil sands region and also has been supported by supply outages elsewhere, including Nigeria, Venezuela and Libya.

There are worries over potential supply shortages from attacks on Nigeria’s oil industry – Africa’s biggest producer until last year, with U.S. commercial crude inventories falling by 3.6 million barrels last week, compared with expectations for a 2.7-million.

This was according to data from industry group, the American Petroleum Institute, on Tuesday after market settlement.

The U.S. Energy Information Administration (EIA) will issue official inventory numbers on Wednesday.

Crude oil rallied in the past two sessions after a militant group in Nigeria’s Niger Delta vowed to halt output in the country, the Nigerian government is yet to dialogue with this militants.

“With Brent staying above $50, oil is on an upward momentum with the restart of French refineries that were shut on strikes and pipeline attacks in Nigeria,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.

According to a source, Nigeria’s Bonny Light crude output is down by an estimated 170,000 barrels per day (bpd) following attacks on pipeline infrastructure.

Also commenting, Dominick Chirichella, senior partner at the Energy Management Institute in New York said: “The market remains concerned about unscheduled supply interruptions with the latest coming from additional shut-ins in Nigeria.

“With the industry projecting a decline in total U.S. crude oil stocks in this week’s reports, the market bears are remaining on the sidelines.”

OPEC failed to agree on a clear oil output strategy last week, but traders said Saudi Arabia’s promise not to flood the market has provided support to oil. They were also reports that oil, along with the rest of the commodities complex, has also been supported by a weaker dollar.

In a bid to strengthen the dollar, U.S Federal Reserve Chair Janet Yellen has indicated the country’s central bank will raise interest rates, but did not indicate when.