Crude Oil Price Forecasts To Rise

The American crude benchmark West Texas Intermediate reached a ten-month high on Wednesday, at over $51 per barrel.

Still, some concerns about global oil demand remain.

"Over the last four weeks, motor gasoline product supplied averaged over 9.6 million barrels per day, up by 2.6 per cent from the same period previous year".

NYMEX crude for July delivery was up 1 cent at $50.37 a barrel by 2342 GMT, after settling up 67 cents or 1.4 percent at $50.36 on Tuesday, the highest settlement since last July.

At the same time, Chinese trade data showed on Wednesday that its May crude oil imports made the biggest year-on-year jump in more than six years, adding to hopes that the economy of the world's second-largest oil user may be stabilising.

The oil market has dealt with production outages in Canada, where fires near major oil sands operations caused output to grind to a halt, while militants in Nigeria have impacted that country's oil output.

Oil prices stood steady near their highest level in about eight months, helped by industry data showing a larger-than-expected drawdown in United States crude inventories and worries about attacks on Nigeria's oil industry.

"The market remains concerned about unscheduled supply interruptions with the latest coming from additional shut-ins in Nigeria", said Dominick Chirichella, senior partner at the Energy Management Institute in NY. Nationwide inventories slid by 3 million barrels, according to the median estimate in a Bloomberg survey before an Energy Information Administration report Wednesday.

Oil was also propped up by a weak dollar, which wallowed near four-week lows against a basket of currencies. The global benchmark crude traded at a 58-cent premium to WTI for August delivery.

The Niger Delta Avengers, a rebel group that has attacked numerous oil facilities in Nigeria, rejected a truce offer with officials and claimed they hit a new target.

Yet analysts say the rally may entice some shale production back online, potentially damaging the prospects for a more sustained price rise. Nationwide inventories dropped by 1.37 million barrels to 535.7 million through May 27, according to the EIA.

  • Neal Todd