NEW DELHI– Oil prices have just passed a key milestone on their long journey out of the doldrums, hitting $50 for the first time in 2016.
Brent crude, one of three key benchmarks for global oil trade, was first to cross the $50 threshold early on Thursday, and U.S. WTI crude followed a few hours later.
Prices were pushed higher by a report published on Wednesday that said U.S. crude stocks had fallen by more than expected, suggesting market conditions could tighten further.
Meanwhile, supply disruptions in Canada, Nigeria and Venezuela are contributing to surging prices. Stronger demand from India, China and Russia has also played a role.
WTI crude was trading just above $26 a barrel as recently as mid-February, its lowest level since 2003.
Firmer prices are good news for OPEC countries led by Saudi Arabia. It means that their strategy to squeeze rival producers by pumping near-record amounts of crude despite the low prices may finally be working.
OPEC countries are due to meet next week in Vienna. A senior Gulf source said there was no discussion of a new bid to freeze production.