Oil Pushes Higher as Focus Shifts to U.S

Technical
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Fundamental
Crude prices pushed higher on Tuesday, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest energy consumer.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2130GMT) Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 1.3 million barrels, which would mark the tenth-straight fall.

U.S. West Texas Intermediate (WTI) crude futures tacked on 30 cents, or 0.5%, to $63.87 a barrel by 3:30AM ET (0830GMT). The U.S. benchmark hit its highest since Dec. 2014 on Jan. 16 at $64.89 a barrel.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., were at $69.31 a barrel, up 27 cents, or 0.4%, not far off the Jan. 15 three-year high of $70.37 a barrel.

Oil prices finished higher on Monday following comments from influential OPEC member Saudi Arabia that the cartel and other major oil producers could extend their production cuts beyond 2018.

OPEC and non-OPEC oil producers have a consensus that they should continue cooperating on production after the end of 2018, when their current agreement on production cuts expires, Saudi Arabian energy minister Khalid al-Falih said on Sunday.

Falih added that this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months.

Oil prices have risen almost 50% from around $43 a barrel in June, 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.

Analysts and traders have recently warned that U.S. shale oil producers could ramp up production as they look to take advantage of higher prices, potentially derailing an OPEC-led effort to curb excess supply.

The International Energy Agency (IEA), in its monthly report last week, warned that U.S. output levels could soon exceed 10 million barrels per day (bpd), a level not seen since 1970.

In other energy trading, gasoline futures were steady around $1.890 a gallon, while heating oil gained 0.3% to $2.062 a gallon.

Natural gas futures rallied 5.2 cents, or 1.6%, to $3.276 per million British thermal units.