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New York, US (BBN) – Crude oil prices rose to five-week highs in Asia on Tuesday with industry data on US inventories later in the day expected to underpin market views on demand and supply in the world’s top importer.
On the New York Mercantile Exchange crude futures for May delivery rose 0.17 per cent to $53.17 a barrel, while on London’s Intercontinental Exchange, Brent gained 0.21 per cent to $56.10 a barrel, reports
Later Tuesday, the American Petroleum Institute (API) will report estimates of inventories for crude and refined products at the end of last week, followed by official data from the US Energy Information Administration (EIA) on Wednesday.
The two sets of figures diverged sharply last week with API showing a crude draw and EIA a build.
Analysts expect a 316,000 barrels build in crude supplies, and a drop in gasoline stocks of 1.761 million barrels and a decline in distillate supplies of 896,000 barrels.
Overnight, crude settled higher on Monday, after production halted at Libya’s largest oilfield for the second time in as many weeks while rising geopolitical tensions in the Middle East lifted sentiment.
Libya’s Sharara oilfield was shut on Sunday, after a group blocked a pipeline linking it to an oil terminal, a Libyan oil source said. Crude prices continued to trade with upside bias, after last week’s US missile strike on an airbase in Syria, underpinned a rally in oil prices, as investors worried about potential supply disruptions in the region.
Although, Syria is no longer a significant oil producer, it neighbors and has relationships with big oil producers in the oil-rich region.
A rise in geopolitical tensions and potential supply disruptions overshadowed concerns that rising levels of global oil supply, particular in the US, would dampened OPEC’s effort to drain the glut in supply.
Meanwhile, Kuwait oil chief, Essam al-Marzouq, fuelled expectations that OPEC would reveal further cuts in March compared to previous months, after he said he expected producers’ level of compliance with the deal to cut global supply would “be higher than the previous couple of months”.
Essam al Marzouq’s bullish comments came amid renewed hopes that OPEC would extend its current deal to cut production beyond June, after Russian Deputy Prime Minister Arkady Dvorkovich expressed his concern on Friday, that the deal to cut supply hasn’t delivered as much as expected.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd).