US oil prices on Tuesday rose on cues of strong demand for crude and ahead of a Gulf Coast tropical storm.
Light and sweet crude meant for delivery in July, the Unites States benchmark, was up 45 cents or 0.8 per cent to reach US$ 59.97 per barrel on the New York Mercantile Exchange. The hike brought an end to a losing streak of three sessions.
The global contract Brent for the month of August came to a close on 25 cents or 4 per cent to reach US$ 63.70 per barrel on the ICE Futures Europe exchange. The leading global price benchmark Brent was down on a fourth consecutive losing session, which is its lengthiest losing session since the middle of March.
The production of oil in the United States may have peaked and the refineries in the country are still possibly reviving from record high levels. This has given the market some hope that it may have found a balance. The Wall Street Journal’s analysts report that crude supplies dropped by 1.8 million barrels last week and refineries upped their rate of usage by 0.2 percentage point.
The updated weekly inventory information is expected to be announced on Wednesday by the Energy Information Administration. Industry group The American Petroleum Institute said on Tuesday that information released by its agency for the same week reveal a 2.9 million barrel draw in supplies of crude oil. The American Petroleum Institute also stated that supplies of gasoline dropped by 2.9 million barrels. The group said that stocks of US distillate rose 1.6 million barrels that week.
Phil Flynn, a senior market analyst at Price Futures Group based in Chicago said that there is anticipation that there might be yet another drawdown in inventories of crude oil. Phil Flynn further added that there is a sense that the production of oil in the United States is peaking and there is also an expectation of a psychological bounce from the Tropical Storm Bill.