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Crude oil hits $50 a barrel

By The Citizen
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The price of oil has gone above $50 a barrel for the first time in 2016 as supply disruptions and increased global demand continue to fuel a recovery.

The benchmark Brent crude price hit $50.07 a barrel in Asian trade.

The rise followed United States data on Thursday showing that oil inventories had fallen, largely due to supply disruptions following fires in Canada, the BBC reports.

Brent crude has now risen 80 per cent since it hit 13-year lows of below $28 a barrel at the start of the year.

U.S crude oil inventories fell by 4.2 million barrels to 537.1 million barrels in the week to May 20, according to U.S Department of Energy data.

Canada is the biggest supplier to the U.S and wildfires in the western provinces have knocked out about a million barrels a day.

Talks in recent months between OPEC and Russia about freezing oil production had already helped prices recover.

Short-term disruptions to oil supplies have also lifted the price, as they have offset higher production from Iran and Saudi Arabia.

As well as the disruption to key oil production facilities in Canada, attacks by militant groups continue to restrict oil pipelines in Nigeria.

Demand has also been better than expected from major economies such as China, India and Russia.

Against this improving backdrop, analysts are starting to modestly raise their forecasts.

Goldman Sachs said earlier this month that it now expected oil prices to consistently hit $50 a barrel in the second half of 2016 and $60 by the end of 2017