Oil Holds Surge as Supply Disruption Adds to Market Optimism

(Bloomberg) — Oil held the biggest daily rally since October as a disruption to supply from Turkey added to easing concerns over the banking crisis.

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West Texas Intermediate futures traded near $73 a barrel after jumping more than 5% on Monday. A legal dispute between Iraq, its semi-autonomous region of Kurdistan and Turkey have halted around 400,000 barrels a day of exports from Ceyhan port, tightening the market. That’s coincided with optimism that the worst of the recent banking turmoil may be over.

Oil remains on track for a fifth monthly decline as concerns over a potential US recession and resilient Russian energy flows weighed on prices. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year, with a top Chinese producer forecasting a surge in demand.

Investors will be watching comments from several Federal Reserve officials and a key measure of US inflation this week for clues on the path forward for monetary policy. Interest-rate hikes have added to bearish sentiment.