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Oil prices surge ahead of US supply data
[NEW YORK] Oil prices surged on Tuesday as traders girded for a bullish US crude storage report and the government lowered its forecast for American production in the second half of 2015.
US benchmark West Texas Intermediate for delivery in July jumped US$2 to US$60.14 a barrel on the New York Mercantile Exchange.
European benchmark Brent North Sea crude for July delivery added US$2.19 to US$64.88 a barrel in London.
Analysts expect the weekly US report on domestic commercial energy stockpiles will show lower supplies on Wednesday in a sign of a tighter market.
"I think we'll see inventories come down," said Carl Larry, a consultant for Frost & Sullivan in Houston. "It will keep the momentum (on prices) to the upside." Tuesday's rise is "a little bit of a run before the stats," Mr Larry added.
Meanwhile, in its short-term energy outlook on Tuesday, the US Department of Energy said US oil production stood at a lofty 9.6 million barrels a day in May, but that it is expected to "generally decline" through early 2016.
Oil prices have been choppy since the Organisation of the Petroleum Exporting Countries last week kept its production ceiling unchanged, ignoring calls to cut output after a big drop in crude prices over the last year.
Analysts also cited data showing Chinese inflation fell to 1.2 per cent in May. The weak inflation data suggest is the latest to suggest the world's number two economy is stalling, potentially prompting more monetary stimulus.