Oil futures rose slightly on Wednesday, building on a weeks of gains ahead of a looming decision on output cuts by major producers and prospects of falling U.S. supplies.
The American Petroleum Institute, a private industry group, said late Tuesday in the U.S. that crude and gasoline stockpiles declined last week. Drops are also anticipated to be seen in later Wednesdays government report.
That as folks for some time have been focused on Thursdays meeting of the Organization of the Petroleum Exporting Countries. An extension of ongoing production cuts is anticipated, and they could even be deepened as global supplies remain well above 5-year averages–a level cartel members want inventories to fall back to.
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Light, sweet crude for July delivery CLN7, +0.17% on the New York Mercantile Exchange was recently up 13 cents, or 0.3%, to $51.60 a barrel in the Globex electronic session. Brent crude LCON7, +0.22% , the global benchmark, rose 16 cents, or 0.2%, to $54.31.
Investors hopes the past 2 1/2 weeks have been buoyed by reports that Saudi Arabia is garnering support among major producers for a potential nine-month extension of production cuts.
If confirmed, we will see a bounce in the market very quickly, said OM Financials Stuart Ive. That as there are plenty of reasons to think that demand will be increasing. He thinks oil could get toward $65 by years end provided there is compliance by all participants to the output cuts.
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Nymex June gasoline futures RBM7, +0.43% were recently up 0.4% at $1.6677 a gallon and ICE gasoil rose 0.1% to $479.25 per metric ton. Diesel, which through Tuesday had gained 10-straight sessions for the first time since New Years 2010, added 0.3% to $1.6175 a gallon.
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