February's 18 per cent gain was the biggest monthly
percentage rise for Brent crude since May 2009.
Oil up sharply; posts first monthly gain since June
NEW YORK, February 28, 2015
Crude oil rose sharply on Friday as Brent and US futures posted their first monthly gains since June, supported by an improving demand outlook and supply outages.
On its way to contract expiration, March New York ultra-low sulfur diesel (ULSD) gained more than 7 per cent in volatile trading, and the 36 per cent February increase was the biggest percentage monthly rise in 15 years.
Brent crude rose $2.53 to $62.58 a barrel. February's 18 per cent gain was the biggest monthly percentage rise since May 2009.
US crude rose $1.59 to settle at $49.76, managing a 3.1 per cent February gain.
Both Brent and US futures briefly pared gains after Baker Hughes Inc data showed its US oil drilling rig count fell only 33 to 986 this week.
US crude gains have been curbed by rising crude oil inventories in the United States, up 8.4 million barrels last week, according to government data.
Money managers cut their net long US crude futures and options positions in the week to Feb. 24, the US Commodity Futures Trading Commission (CFTC) said Friday.
Both contracts have been supported by signs that lower prices are starting to reduce investment in non-OPEC production, even as the US rig count slide slows.
Brent's more pronounced February gains have been fueled by disruptions to production and exports from Libya and Iraq.
"The main event this week has been the widening of the spread between Brent and WTI (US crude)," said Ole Hansen, senior commodity strategist at Saxo Bank.
The spread between Brent and US crude was as wide as $13 a barrel on Friday, the highest Brent premium since January 2014.
Brent has also received support from strong US refined products futures.
"Cold weather and refinery problems and tight supplies on the East Coast have helped make the ULSD contract the most sensitive part of the oil sector," said Robert Yawger, director for energy futures at Mizuho Securities USA in New York.
March ULSD rose 16.31 cents to settle at $2.2989 a gallon, after reaching $2.3325, a 2015 peak and the highest since November.
March's premium to April ULSD swung from 22.35 cents a gallon to 37.69 cents on Friday.
March RBOB gasoline rose 6 cents to settle at $1.7676 a gallon, going off the board above RBOB's 100-day moving average of $1.7658.
Both products posted the first monthly gains since June. – Reuters
