Oil prices rise as USA stockpiles expected to decline

Oil prices rise as USA stockpiles expected to decline

Oil prices rise as USA stockpiles expected to decline

Potential further steps by OPEC, rising global oil demand and the reduction in USA drilling and its crude oil stocks are some of the factors that could raise oil prices in the short term, said Frank Schallenberger, head of commodity research at Landesbank Baden-Wuerttemberg.

The market has been concerned that, once the supply cut deal comes to an end, producers will ramp up supplies again, causing prices to fall.

Minister Khalid al-Falih, told Reuters at an investor conference in Riyadh on Tuesday that global oil demand is expected to grow by 45 per cent by 2050 despite an worldwide push for using more renewable sources of energy.

The oil price was higher in Monday trade, on a number of developments supportive of a higher value of the commodity. "The market continues to have an upward bias".

Brent crude oil, the world's global oil benchmark, jumped towards $58 a barrel on Monday - its highest level since January - and was on course to close at the highest level since 2015, The Financial Times reported. Supply-side strains last year pushed the price of oil below $30 per barrel and movement above $50 per barrel this year is supported by an effort by the Organization of Petroleum Exporting Countries to drain the five-year surplus on global crude oil inventories with managed production declines. The pact runs to March 2018 and they are considering extending it.

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West Texas Intermediate was also running bullishly in today's market and was reported to rally by 6 cents or a total of 0.01% and settling at $51.90 per barrel.

Preliminary data from the American Petroleum Institute (API), an industry group, said USA crude oil stocks rose 519,000 barrels in the week as refined products drew. Asian demand in particular has been strong, with crude flows to India rising to a new high last month, at 4.6 million barrels a day, according to energy data provider Kpler.

The US government's Energy Information Administration releases its report on Wednesday. The move has led to clashes with Iraqi forces retaking the oil-rich Kirkuk area, throwing into question Kurdistan's ability to export oil through Turkey and raising doubts about investments from big oil companies.

Crude oil exports through the Iraqi Kurdistan-controlled pipeline to the Turkish port of Ceyhan rose 13% to 288,000 barrels a day on Monday afternoon, but that was still less than half normal levels due to tension in the region, a shipping source told Reuters.

Crude prices have risen over the past few weeks following an independence referendum in Iraq's northern, semiautonomous Kurdish region.

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