Oil prices on Tuesday gained ahead of anticipations of a decline in supplies of gasoline and US crude oil.
West Texas Intermediate, the benchmark of US crude oil, was up 63 cents or 1 per cent to reach US$ 61.01 per barrel on the New York Mercantile Exchange. The global benchmark Brent was up US$ 1.11 or 1.8 per cent, to settle at US$ 64.45 per barrel on ICE Futures Europe.
Earlier in the year, prices of oil rallied sharply as crude oil inventories in the United States dropped from record highs and investors turned out to be increasingly bullish owing to rising global demand as well as cutbacks in new drilling. However, in recent weeks, the market has been stagnant ahead of cautions that the world continues to witness an oversupply of crude oil and any additional price gains could possibly lead to new production.
In a note, Citigroup Inc., said on Tuesday that prices of crude oil continued to be stuck between a US$ 65 WTI cap and US$ 60 Brent floor. The former is where producers of US shale are likely to come back, while the latter is where consumer interest stays up.
The weekly US inventory data is being closely watched by traders to receive further clues on the balance between demand and supply. The United States Energy Information Administration is expected to release its information on Wednesday meant for the week that ended on Friday.
The Wall Street Journal surveyed analysts, who anticipate the agency to reveal that stockpiles of crude dropped by 2.3 million barrels during the week since more crude was being processed into gasoline and other fuels by refineries. The analysts also anticipate the report by the EIA to reveal that supplies of gasoline dropped by 200,000 barrels and distillates stocks, including diesel fuel and heating oil, spiked by 800,000 barrels.