LONDON: Oil prices rose on Tuesday, lifted by indications that supply is gradually tightening, especially in the United States.
Benchmark Brent crude was up 30 cents at $51.96 a barrel by 1345 GMT. US light, sweet crude was also 30 cents higher at $47.67.
"US crude oil stocks have been falling consistently in recent weeks," said Fawad Razaqzada, market analyst at futures brokerage Forex.com.
"If the downtrend in oil inventories is maintained, then a bullish case can be made for oil, especially given the ongoing supply restrictions from OPEC and Russia," he added.
US commercial crude inventories have fallen by almost 13 percent from their March peaks, to 466.5 million barrels.
The Organization of the Petroleum Exporting Countries and non-OPEC producers including Russia have pledged to hold back about 1.8 million barrels per day (bpd) of output between January this year and March 2018 in order to tighten supplies and prop up prices.
Oil prices found extra support from news that Libya's Sharara oilfield, the country's largest, shut on Tuesday just hours after reopening following a three-day pipeline blockade.
But oil production elsewhere has been rising.
US crude production has broken through 9.5 million bpd, its highest since July 2015.
Some analysts say US oil output growth will slow as energy firms cut the number of rigs drilling for oil.
So far, however, the increase in US production has been relentless with increasing volumes from shale, particularly from the giant Permian basin in Texas and New Mexico.
"With US shale oil production proving more than resilient, the autumn period presents a lot of downside risk to oil prices," Harry Tchilinguirian, chief oil market strategist at French bank BNP Paribas, told Reuters Global Oil Forum.
The weekly rollout of data on US inventories starts later on Tuesday. Industry group the American Petroleum Institute will publish statistics on crude inventories and refinery operations for last week at 4:30 p.m. EDT (2030 GMT).
On Wednesday, it will be the turn of the US government's Energy Information Administration.
US crude inventories are expected to have fallen for an eighth straight week and drop by 3.4 million barrels, a Reuters poll shows.
"Another decline in US crude stocks may push prices somewhat higher again, but the upside may be limited - especially if US crude production ticks higher again," said Hans van Cleef, energy economist at ABN AMRO.
Comments
Comments are closed for this article.