Oil Steadies Around $61, Kuwait Sees Prices Supported

Oil steadied around $61 a barrel on Monday, holding gains from last week, after Kuwait’s oil minister said lower supply levels would support prices in the second half of the year.

The recent rally “will start holding gains now and hopefully in the second half of 2015 we will see better prices”, the minister, Ali al-Omair, said.

Supported by signs of lower industry spending, the price of Brent crude has increased by more than 30 per cent in the last four weeks. In January it hit $45.19, the lowest in almost six years, after collapsing from $115 in June due to oversupply.

Omair said the current oil surplus was now “definitely lower” than 1.8 million barrels per day.

Benchmark Brent futures traded at $60.89 a barrel, down 63 cents, by 0920 GMT. U.S. crude was down 55 cents at $52.23. Trading volumes were reduced as U.S. markets remained closed for a public holiday.

Oil markets rose strongly last week after another drop in the U.S. rig count, pushing Brent back above $60 a barrel for the first time since December.

“Now we need to watch and see if $60 can hold as a support line,” said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland. “I think that’s really the level to watch on Brent.”

Escalating conflicts with Islamic State militants and an attack on an oil pipeline in Libya helped support prices.

Egypt’s air force bombed Islamic State targets inside Libya for the first time on Monday, a day after the group released a video appearing to show the beheading of 21 Egyptians there.

Libya’s El Sarir oilfield is still unable to pump oil to Hariga port after a pipeline was attacked and set on fire on Saturday.

“The geopolitical risk is not something to write off,” Jakob said.

In Asia, data showed Japan’s economy rebounded from recession in the final quarter of last year but growth was weaker than expected as household and corporate spending disappointed.