Investing.com - Crude oil prices were mixed on Tuesday with the market awaiting the US open after a long holiday weekend and digesting a view from Morgan Stanley (NYSE:MS) of $75 a barrel crude oil by the third quarter of 2018 as well as supply data from the US later this week.
Initial estimates point to a 3.89 million barrels weekly decline in crude stocks and a 2.625 million barrels build in gasoline supplies.
US West Texas Intermediate crude February contract rose 0.31% to $64.50 a barrel after overnight limited trading with the NYMEX exchange floor closed on Monday because of the Martin Luther King Day holiday. All electronic transactions will be booked with Tuesday's trades for settlement. Elsewhere, Brent oil for March delivery on the ICE Futures Exchange in London fell 0.37% to $69.97 a barrel after crossing $70 overnight and earlier in Asia.
"The current level of backwardation in oil futures curves is still a relatively recent phenomenon," Morgan Stanley said in a note to clients.
"If this persists for an extended period, we expect it will continue to attract inflows into the futures market. As these flows can be much larger than physical flows, this should drive oil futures prices higher during the course of this year. We raise our Brent forecast to $75/bbl by 3Q18."
Overnight, crude oil prices were mixed on Monday, but they were still hovering near multi-year highs as overall optimism regarding the rebalancing of the market continued to support the commodity.
Oil prices dipped earlier, after data from General Electric (NYSE:NYSE:GE)'s Baker Hughes energy services unit showed that the number of oil drilling rigs climbed by 10 to 752 in the week to Jan. 5, the first increase to drilling numbers in five weeks.
But the commodity remained supported amid ongoing optimism that OPEC-led output cuts would continue to drain the market of excess supplies.
Futures have added around 13% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day (bpd) was adopted last winter by OPEC, Russia and nine other global producers. The agreement was due to end in March 2018, having already been extended once.
However, analysts and traders have warned that the recent rally could encourage U.S. shale oil producers to ramp up production as they look to take advantage of higher prices.
Elsewhere, gasoline futures inched up 0.04% to $1.849 a gallon, while natural gas futures lost 2.41% to $3.123 per million British thermal units.
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