(Bloomberg) — Oil rose on signs that demand this year may be stronger than expected while an Israeli attack in Syria threatened to widen the conflict in the Middle East.
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West Texas Intermediate advanced as much as 1.6% to trade above $84, reaching the highest intraday price since Oct. 30. China’s industrial activity rebounded in March to snap a five-month decline, stoking expectations that oil consumption in the world’s biggest crude importer might be rebounding, while Goldman Sachs Group Inc. said it’s seeing resilience in European demand.
Meanwhile, an Israeli airstrike on Iran’s embassy compound in Syria killed a top military commander, according to state media reports, potentially escalating the war.
In the US, tightening supplies at the key storage hub in Cushing, Oklahoma, have propped up prices for near-term barrels. The so-called WTI cash roll — the price for barrels for immediate delivery at Cushing — traded at a premium of $1.50 a barrel Monday, the highest since early March, traders said.
Crude surged 16% in the first three months of the year as markets focused on strong consumption. The Organization of Petroleum Exporting Countries and its allies have also cut back supplies, helping offset the impact of increased flows from outside the cartel. The group is expected to affirm its current output policy at an online review meeting scheduled for Wednesday.
Yet traders are keeping a close eye on a potential reversal after money managers poured heavily into oil the previous week. Brent long positions rose to the highest in more than a year last week, according to figures from ICE Futures Europe. Algorithms for the global benchmark reached their maximum long positions, according to data from Bridgeton Research Group.
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