US crude oil closes at 2014 high

[NEW YORK] Crude oil closed solidly higher on Tuesday, with the US futures contract hitting their highest point so far this year on expectations of a decline in US production.

The US benchmark, West Texas Intermediate for May delivery, rose $1.84 to finish at $53.98 a barrel on the New York Mercantile Exchange, the highest close since December 30, at $54.12.

In London trade, Brent North Sea crude for May, the global benchmark, settled at $59.10 a barrel, up 98 cents from Monday.

Both contracts clawed back from losses to end trade firmly in positive territory, extending Monday's hefty $3 gains after the nuclear framework deal last week between Iran and major powers was seen as having a minimal near-term effect on global crude supplies.

Traders looked ahead to Wednesday's weekly US Department of Energy inventories report. Analysts expected it would show another rise. But they also expect that US crude production, at over nine million barrels per day, would dip for the second week in a row.

Analysts said the oil market also continued to be underpinned by news that Saudi Arabia had raised crude oil prices for Asia.

"Demand for oil is obviously starting to recover in Asia, enabling Saudi Arabia to offer its oil at smaller discounts," Commerzbank said in a research note.

AFP