US crude futures surge on report

HOUSTON (ICIS)–NYMEX crude futures for October delivery reversed early losses and extended recent gains, settling on Monday at $49.20/bbl, up $3.98, in response to released data showing US oil production declining more than expected in 2015.

A newly issued report from the Energy Information Administration (EIA) revised downwards oil production for the year to slightly below 9.3m bbl/day after peaking in April.

The market also responded to an OPEC bulletin suggesting that the group was prepared to engage in a dialogue with other producers in order to discuss oil prices.

An aggressive round of buying triggered technical resistance barriers, triggering buy stops.

A feeding frenzy across the energy complex lifted West Texas Intermediate (WTI), the US benchmark, to hit an intra-day high of $49.33 bbl, up $4.11, before the buying was exhausted.

Despite limited volume as a result of a UK bank holiday, October ICE Brent established an intra-day high of $54.32/bbl before pulling back on profit taking to settle at $54.15/bbl, up $4.10.