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Oil moves higher ahead of weekly inventory data

Oil moves higher ahead of weekly inventory data

Crude prices rose for the third straight day alongside Wall Street with oil traders awaiting the release of key data Tuesday that may provide a clearer picture of energy demand.
Oil also benefited from remarks by Federal Reserve Chairman Ben Bernanke who told the Council on Foreign Relations that the U.S. recession could end this year if the government is successful in getting financial markets to operate more normally. The recession, now in its second year and already the longest in a quarter-century, has turned out to be more severe than the Fed had anticipated, he acknowledged in fielding questions after his speech.
Light, sweet crude for April delivery rose 66 cents to $47.73 a barrel on the New York Mercantile Exchange after closing at a two-month high Monday. Oil prices gained $1.55 on Monday to settle at $47.07.
In London, Brent prices rose $1.38 to $45.51 on the ICE Futures exchange.
"Today, we can be optimistic about potential demand in the future," said Phil Flynn of Alaron Trading Corp.
The Energy Information Administration releases its monthly short-term energy outlook later Tuesday, and that is followed by U.S. crude inventory expectations by the American Petroleum Institute.
Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., expect that the government will report that inventories of both crude and gasoline declined last week.
"Assuming crude imports steadied out at about 9 million barrels per day with no change in refinery inputs, there will likely be another drop in commercial crude stocks," said Linda Rafield, Platts senior oil analyst.
On Wednesday, the Paris-based International Energy Agency will release its forecast for global demand.
If forecasts for oil demand are weak, "That may dampen some of the enthusiasm we've seen the past couple of days," Flynn said and could serve as a "reminder what we're not out of the muck just yet."
Oil also benefited from a strong rally that pushed the Dow Jones industrial average, which closed Monday at its lowest level since the spring of 1997, up nearly 4 percent in trading Tuesday morning.
Traders are watching to see whether the Organization of Petroleum Exporting Countries, which produces 40 percent of the world's crude, cuts output quotas at its next meeting on Sunday in Vienna.
Investors believe OPEC could announce fresh production cuts of between 500,000 and 1 million barrels a day, said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore.
"If the cut exceeds expectations, there would be a short-term pop in prices," Chu said. "But it will take months for the cut to affect supplies in the U.S. It's not an overnight thing."
In other Nymex trading, gasoline for April delivery rose 2 cents to $1.3546 a gallon, while heating oil rose 4.27 cents to $1.2581 a gallon. Natural gas for April delivery rose 4 cents to $3.905 per 1,000 cubic feet.
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Associated Press writers Jeannine Aversa in Washington, Pablo Gorondi in Budapest, Hungary, and Alex Kennedy in Singapore contributed to this report.


Updated : 2021-08-06 01:54 GMT+08:00