US oil price hits 2016 high on hopes of lower inventories
This March 13, 2012 photo shows the manifolds that regulate the input and output of oil to the White Cliffs pipeline at the SemCrude tank farm north of Cushing, Oklahoma. Oil prices have hit a new 2016 high over expectations of a decline in US inventory and production problems in Nigeria. AP FILE
NEW YORK, United States — World oil prices rose Tuesday, with US crude striking a seven month high as traders expect data showing a decline in American commercial inventories and weigh production problems in Nigeria.
“The price of crude oil snapped a two-day slump on Tuesday ahead of an expected draw in US weekly inventories from API data,” said CMC Markets analyst Jasper Lawler.
READ: Fuel prices up on jitters
Investors awaited the American Petroleum Institute’s report on US crude inventories last week, due later Tuesday, and the official data for that week from the US Department of Energy on Wednesday.
Expectations are running unusually high for a decline in US supplies, given the wildfires that have interrupted oil production in Canada, the biggest supplier of crude to the United States.
Article continues after this advertisementUS benchmark West Texas Intermediate for July delivery advanced 54 cents to $48.62 a barrel on the New York Mercantile Exchange, the highest closing price since October.
Article continues after this advertisementIn London, Brent North Sea oil, the European benchmark, for July delivery finished at $48.61 a barrel, up 26 cents from Monday’s settlement.
Bob Yawger of Mizuho Securities USA noted that prices were supported Italian oil company Eni’s force majeure declaration after attacks over at its Brass Rivers terminal in Nigeria, in essence saying it cannot guarantee production to customers.
Crude prices have rebounded since plunging to near 13-year lows below $30 a barrel in February amid abundant global supplies. But they are still well short of peaks of more than $100 reached in June 2014.
“Overall the market is still in an uptrend, with the thought process that in the longer term things will balance out and tighten up,” said Kyle Cooper at IAF Advisors.
