February is on track to be the best month for oil since June 2014. Brent April crude LCOc1 was up $1.27 at $61.32 , on track to post a 15 percent monthly gain, the first since June and biggest in percentage terms since May 2009.
U.S. April crude was also up 63 cents at $48.80 a barrel, needing a finish above $48.24 to post a February gain.
So what does this all mean? If nothing it tells you it will take a lot more to get oil price below $40 and to a level where shale gas producers will be completely out of business. But why was February this good? Here are a few reasons ;
OPEC’s oil supply has fallen this month as bad weather delayed exports from Iraq’s southern ports, a Reuters survey found on Friday, slowing an expansion of supplies in the group’s second-largest producer.
The survey also found slightly higher output in Saudi Arabia, a sign that the largest producer in the Organization of the Petroleum Exporting Countries is sticking to its strategy of focusing on market share rather than cutting output.
LIBYA and IRAQ
OPEC supply has fallen in February to 29.92 million barrels per day (bpd) from a revised 30.27 million bpd in January, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants.
The main reasons for the decline are involuntary – poor weather slowing Iraq’s exports and unrest in Libya. OPEC at a meeting in November decided to retain its output target of 30 million bpd, despite collapsing prices and concerns from members such as Iran and Venezuela about falling oil revenue.
Iraq’s southern exports declined to 2.05 million bpd, from 2.39 million bpd in January, the survey found. Exports from northern Iraq, comprising volumes of Iraq’s State Oil Marketing Organisation and the Kurdistan Regional Government, have risen by 50,000 bpd, sources said.
NIGERIA & ANGOLA
Elsewhere in OPEC, Angola lifted supply slightly in February, the survey found, partly due to a new crude stream, Sangos. The other West African OPEC member, Nigeria, exported less due to fewer shipments of its largest stream, Qua Iboe.