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Oil climbs above US$50 as US crude stockpiles seen declining

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Oil advanced above US$50 a barrel as US industry data showed crude stockpiles declined, trimming a glut.

[HONG KONG] Oil advanced above US$50 a barrel as US industry data showed crude stockpiles declined, trimming a glut.

August futures climbed as much as 1.2 per cent in New York. Inventories fell by 5.2 million barrels last week, the American Petroleum Institute was said to report.

Government data Wednesday is forecast to show supplies slid by 1.5 million barrels. Both the Nigerian presidency and militants denied reports that they had reached a 30-day cease-fire agreement.

Oil has fluctuated the past week amid turmoil in global markets on uncertainty about the potential outcome of the UK referendum Thursday on staying in the European Union.

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Crude in New York has advanced more than 90 per cent from the lowest level in 12 years in February as disruptions from Nigeria to Canada and falling production in the US ease a global surplus.

"The oil price will probably continue to labor around this US$45 to US$50 a barrel area for some time," David Lennox, an analyst at Fat Prophets in Sydney, said by phone.

"Demand is still under question. Inventories are declining, but they're still large and will cap any significant rally."

West Texas Intermediate for August delivery rose as much as 60 US cents to US$50.45 a barrel on the New York Mercantile Exchange and was at US$50.23 at 8:14 am Hong Kong time.

The July contract expired Tuesday after losing 52 US cents, or 1.1 per cent, to US$48.85 a barrel. Total volume traded was about 55 per cent below the 100-day average.

Brent for August settlement rose as much as 44 US cents, or 0.9 per cent, US$51.06 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of 67 US cents to WTI.

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