* Crude futures have rallied for most of past two weeks
* EIA expects U.S. shale output to drop in June for 8th
month
(Adds comment, updates prices)
By Aaron Sheldrick
TOKYO, May 17 (Reuters) - Oil futures rose for a second
straight session on Tuesday, with U.S. crude hitting a
seven-month high, as the market focused on supply disruptions
that prompted long-time bear Goldman Sachs (NYSE:GS) to issue a bullish
assessment on near-term prices.
Crude oil prices have rallied for most of the past two weeks
due to a combination of Nigerian, Venezuelan and other outages,
declining U.S. output and curtailments of Canadian crude after
fires in Alberta's oil sands region.
U.S. West Texas Intermediate (WTI) futures CLc1 were up 67
cents at $48.39 a barrel at 0635 GMT, the highest since October.
Brent crude futures LCOc1 were up 37 cents at $49.34 a
barrel, near the six-month high of $49.47 reached on Monday.
Outages throughout May will average 3.2 million barrels per
day (bpd), Energy Aspects analyst Amrita Sen said in a research
note.
"The longer these outages, the quicker the pace of
rebalancing," Sen said.
"Although refining margins remain weak, we maintain our view
that persistent crude stock draws (will) begin by end Q2 16,"
she said.
The disruptions triggered a U-turn in the outlook for the
oil market from Goldman Sachs. The U.S. bank, which had long
warned of global storage hitting capacity and of another oil
price crash to as low as $20 a barrel, now sees U.S. crude
trading as high as $50 in the second half of 2016.
A further bullish note was sounded by the U.S. Energy
Information Administration (EIA) when it said shale oil output
is expected to drop in June for an eighth consecutive month.
Shale output is expected to fall by nearly 113,000 bpd to
4.85 million bpd, as the nearly two-year slump in prices
continues to undermine profitability for drillers, the EIA
report released on Monday shows.
Oil prices were also drawing support from fires burning
around the Canadian oil sands hub of Fort McMurray.
The fires were growing and moving rapidly north late on
Monday, forcing firefighters to shift their focus to protecting
major oil sand facilities north of the city, officials said.
A dozen work camps south of the major projects faced
mandatory evacuation notices.
CHART: Brent oil may retest resistance at $49.56 http://graphics.thomsonreuters.com/US/2/PVB_20161705091609.png
CHART: U.S. oil may gain more to $48.62 http://graphics.thomsonreuters.com/US/2/PVB_20161705090614.png
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