On Monday morning, U.S. stock market rise higher as the energy sector increases along with oil prices. It is pushing back towards $50/barrel as outages keep curbing supplies.
U.S. crude oil for July has recently increased by 2.4% to $49.80 per barrel, but it had been down as much as 1.8% earlier. Brent, the global benchmark, gained 2.2% to $50.75/barrel on ICE Futures Europe.
Oil supply in Nigeria continues to be affected by attacks from Nigerian militants that have already cut it to multiyear lows. Last Friday morning bombings struck two pipelines, with Royal Dutch Shell PLC (NYSE: RDS.A) confirming signs of a spill from one it owned. The Twitter account owned by a band of saboteurs that calls themselves the “Niger Delta Avengers” called one of the attacks part of its promise “that Nigeria Oil production will be Zero.”
“If the Nigerian output goes to Zero … oil price is going higher,” ICAP PLC broker Scott Shelton noted. “At this point, there is no sign that the Nigeria is getting any better, and it’s looking worse.”
The Federal Reserve Chair, Janet Yellen will speak to the World Affairs Council in Philadelphia on Monday afternoon, and, as always, investors will be looking for clues about the Fed's plans for interest rates. Until Friday, most investors expected the Fed to raise interest rates in July, but after a surprisingly weak May jobs report, they are unsure of the Fed's intentions and fewer investors expect rates to go up. The Fed's policymakers will meet next week.
U.S. crude futures rebounded approximately 80% since falling to 13-year lows at $26.05 in February as a decline in U.S. shale production boosted sentiment. However, investors are more pessimistic, Citigroup reported. It surveyed investors and found about 60% expecting prices to be between $35 and $55 a year from now. Only about 35% expect them to be higher than that, the bank said.