Oil futures held above $65 a barrel on Tuesday amid lingering global supply concerns despite resumed crude flows from Ecuador and Nigeria.
The rise came amid expectations that Wednesday’s United States petroleum inventories will show declines in both crude and gasoline stocks with little indication that high prices are slowing demand.
A new tropical storm heading toward the Gulf or Mexico added to worries. Still, analysts cautioned against overemphasising its effect on the market, saying such weather is widely expected this time of year.
Light, sweet crude for October on the New York Mercantile Exchange was up four cents at $65,69 a barrel by midday in Europe on its opening day of trade as the front-month contract. It had settled 14 cents lower to $65,65 on Monday.
Nymex crude reached an all-time high of $67,10 a barrel on August 12. Prices are about 40% higher than a year ago, and the Global Centre for Energy Studies (GCES) warned on Tuesday that they could keep climbing.
”Rising global oil demand is continuing to put pressure on the industry’s ability to supply enough oil,” the London-based resources institute said in its latest report.
The world’s daily diet of crude is expected to average about 83-million barrels in the current third quarter before spiking to 85,5-million barrels a day in the fourth quarter of 2005 during winter, the GCES said.
With the end of the American summer driving season looming, analysts are now watching winter demand for distillates — heating oil, diesel and jet fuel — when consumption of the commodities rise.
Nymex heating oil was up to $1,8190 a gallon (3,8 litres) — an increase of more than half a penny — while gasoline was down slightly at $1,8600 a gallon. On London’s International Petroleum Exchange, October Brent crude was up by three cents at $64,53 a barrel.
On Wednesday, the US Department of Energy will release its weekly petroleum data snapshot, an indicator of demand from the world’s largest energy user.
Analysts surveyed by Dow Jones Newswires predicted that gasoline stocks would fall by a million barrels from a week ago, while crude probably fell by 255 000 barrels.
Meanwhile, Tropical Storm Jose formed and began to pick up strength late on Monday, heading for Mexico’s Gulf coast as the active Atlantic hurricane season continued to roil oil markets. Hurricanes have forced rig and production shutdowns on both the US and Mexican sides of the Gulf, hurting supply. — Sapa-AP
Associated Press writer En-Lai Yeoh contributed to this article from Singapore