Oil has continued to rally adding to gains of over 10% in the last two days after a 7th consecutive month of falling prices. Today Brent crude and West Texas Intermediate are further extending gains. Brent Crude added 3.32%, currently trading at USD56.57 a barrel, back far above the important USD50 level. On January 13th Crude hit a low at USD45.19. West Texas Intermediate added 2.95% currently quoted at USD51.03. Disappointing data from China and the U.S. weigh recently on prices. China and the U.S. are the world's largest consumers of oil. Concerns over future output from U.S. shale drillers drives prices up. The number of U.S. oil drilling rigs has declined the most in a week in 30 years. Morgan Stanley warns about over interpreting the significance of the number of rigs active as they don't give an exact indication on overall output. Ongoing strikes on U.S. plants give a further boost to prices.
Worldwide supply still exceeds demand in a period of low global economic growth and the OPEC refusing to cut output rates to stabilize prices. Smaller OPEC members want to cut production but the organisation, responsible for 40% of worldwide production focuses on its fight for market share.