Prices of crude oil rose by 3 per cent or more on Tuesday as bulls increased their bets across the oil industry for yet another weekly decline in stockpiles in the United States. This anticipated drop also caused diesel and gasoline prices to rise just as much.
Crude inventories in the United States possibly dropped for a sixth consecutive week in the week that came to an end on June 5, according to data released by industry group American Petroleum Institute (API) on Tuesday. Official numbers will be released on Wednesday by the government’s Energy Information Administration (EIA).
A poll conducted by Reuters of five analysts predicts that on an average, crude stocks dropped 1.7 million barrels last week.
Brent futures LCOc1 rose by US$ 1.88 or 3 per cent to reach US$ 64.57 per barrel by 12.29 EDT. That was the highest advance of the day for Brent since May 29. Crude futures of US CLc1 were up by US$ 1.70 to reach US$ 59.84 per barrel.
Among refined product, ultra low sulfur, or heating oil HOc1 rose nearly 4 per cent while gasoline RBc1 gained approximately 3 per cent.
Phil Thompson from Houston based energy investment advisory Mobius Risk Group said that the hike is being termed as an across the board run as everyone waits for the inventory data to be released by the Energy Information Administration.
Before the stockpile numbers are released on Wednesday, the EIA stated in a separate report that it has raised its forecast for the oil demand this year from 340,000 barrels per day previously to 380,000 barrels a day.