Oil Holds Gains as US Crude Stockpiles Seen Extending Decline

Oil Holds Gains as US Crude Stockpiles Seen Extending Decline

Oil Holds Gains as US Crude Stockpiles Seen Extending Decline

The market was generally expecting a decline in weekly crude inventories as Tropical Storm Cindy disrupted production in the Gulf of Mexico last week.

Oil prices were sharply higher in North American trade on Tuesday, putting futures on track for their fourth up session in a row, as investors looked ahead to weekly data from the US on stockpiles of crude and refined products.

Prices of oil took a sharp decline since mid-November of past year, after the crude oil contract shutdown 92 cents at $43.51 U.S. per barrel.

In spite of the cuts, inventories have increased as U.S. producers and other countries that are not part of the OPEC-led partnership have grown their production. The global benchmark, Brent, was up 1.4 percent about 15 minutes before the start of trading in NY to $46.47 per barrel. It hit a trough of $44.35 on June 21, its lowest level since November.

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The US West Texas Intermediate crude August contract was at $43.72 a barrel by 3:25AM ET (0725GMT), up 35 cents, or around 0.8 per cent.

Essar Oil, the top Indian buyer of Iranian crude, imported 4.9 percent more Iranian oil during January-May 2017 compared to a year ago, according to the private refiner's crude and condensate imports data released by Reuters.

"I think it's mostly bottom fishing at this point", said John Kilduff, partner with energy hedge fund Again Capital in NY, who noted there was some "book squaring" with the end of the quarter approaching. "I think it's keeping its fingers crossed and looking forward to Q3 and Q4 and hoping their medicine will do the trick", he added.

"I think it's mostly bottom fishing at this point", said John Kilduff, partner with energy hedge fund Again Capital in NY, who noted there was some "book squaring" with the end of the quarter approaching.

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"It is just the fact that the oil market stopped falling ..."

"Three days of price action has been interesting, it has been short covering", said Ric Spooner, chief market analyst at CMC Markets in Sydney.

Analysts at Bank of America-Merrill Lynch said demand had not grown quickly enough to absorb excess output.

Oil fell for a fifth week after slipping into a bear market on concern that rising production from the U.S.to Libya will offset cuts from OPEC and its allies. Iran has also been allowed a small increase.

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