Oil prices rally ahead of API supply data

Published 2016-05-10, 09:42 a/m
© Reuters.  Oil prices rally ahead of weekly supply data
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Investing.com - Oil prices were higher in North American trade on Tuesday, after flipping between gains and losses overnight, as investors looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 0.5 million barrels in the week ended May 6.

Crude oil for June delivery on the New York Mercantile Exchange rose 86 cents, or 1.98%, to trade at $44.30 a barrel by 13:42GMT, or 09:42AM ET, after hitting an intraday low of $43.03, the weakest level since April 26.

A day earlier, Nymex prices lost $1.22, or 2.73%, after data showed rising oil stockpiles in the U.S. According to private forecaster Genscape, supply levels at the key U.S. delivery hub in Cushing, Oklahoma rose by 1.4 million barrels last week.

Nymex oil prices are still up nearly 55% since falling to 13-year lows at $26.05 on February 11, as a decline in U.S. shale production boosted sentiment. However, analysts warned that market conditions remained weak due to an ongoing glut.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery fell to a session low of $43.33 a barrel, a level not seen since April 20, before turning higher to trade at $44.88 during afternoon hours in London, up $1.25, or 2.91%.

On Monday, London-traded Brent futures slumped $1.74, or 3.84%, as investors shifted focus back to a global supply glut.

Brent futures prices are up by roughly 60% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.

Meanwhile, Brent's premium to the WTI crude contract stood at 58 cents a barrel, compared to a gap of 19 cents by close of trade on Monday.

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