Oil prices extended gains on Tuesday, supported by signs of stronger demand, robust production curbs led by OPEC and a slight fall in US output. US West Texas Intermediate crude for April delivery was up 4 cents at $63.95 a barrel by 0223 GMT. The contract, which has risen four days in a row, on Monday hit its highest since Feb. 6 at $64.24. London Brent crude was up for a fifth day, trading 1 cent higher at $67.51 a barrel.
Prices have been rising since the US Energy Information Administration (EIA) last week said there was a surprise draw on oil stockpiles amid a fall off in imports and a surge in exports. “It’s the dwindling Cushing inventories that continue to resonate with oil traders, while another supply disruption in Libya has provided that extra fillip,” said Stephen Innes, head of trading for the Asia-Pacific region at futures brokerage Oanda in Singapore. He was referring to Libya’s National Oil Corp’s declaration of force majeure on Saturday for the 70,000-bpd El Feel oilfield after it was closed by a protest by guards.
“Given last week’s Cushing collapse in oil stockpiles, traders are keenly awaiting this week’s U.S. inventories data,” Innes added. Cushing, Oklahoma is an oil storage hub. U S crude inventories are forecast to have risen by 2.7 million barrels last week, a preliminary Reuters poll showed on Monday.
Gasoline stocks are expected to be down by 600,000 barrels, while distillate inventories, which include heating oil and diesel fuel, were seen down 700,000 barrels. The American Petroleum Institute is scheduled to release its weekly data later on Tuesday, followed by the EIA on Wednesday.
Elsewhere, Saudi Arabian oil minister Khalid al-Falih indicated on Saturday that the country’s crude production would be well below output caps, as the Organization of the Petroleum Exporting Countries and its allies were committed to reducing supply to bring balance and stability to the market.
Prices were also supported by U.S. Energy Information Administration data on Thursday that showed domestic oil production dipped to 10.27 million barrels per day from 10.271 million bpd the week before.