Oil Up Over $1 on Strong US Demand

London: Oil rose over a dollar on Wednesday as strong demand and falling stockpiles in the United States pushed prices higher. Brent futures were up $1.48 at $65.18 a barrel at 1025 GMT (3:55 p.m. in India). Front month US crude futures were up $1.19 at $61.16 per barrel. US Energy Information Administration data due at 1430 GMT (8:00 p.m. in India) is forecast to show US crude stocks fell for a seventh consecutive week, according to a Reuters poll of analysts. J.P. Morgan said in its weekly oil research note that US production had reached a new high this week, but that it would start to drop. An expected fall in US crude production due to the relatively high cost of producing shale has also been supportive of prices. However despite the strength of demand in the United States and Asia, prices have mostly stayed below $65 per barrel this year. This time last year Brent crude surpassed $115 per barrel. An excess supply of oil in the Atlantic basin has seen oil traders leave full tankers floating on the sea. "There are so many tankers floating for prompt delivery that people will want to see the fall in shale production, rather than predictions of a decline before it will give much support," said Maarten van Mourik, an independent oil economist in Paris. Despite this, some analysts say they expect prices to rise somewhat going into the second half of the year as demand is strong and stocks are seen falling. "Fundamentals are at an inflection point and will improve from here with high refinery runs this summer and sequentially declining US crude production. As crude stocks erode, prices will gradually strengthen," said US-based Pira Energy. Strong US fuel demand, this week's tropical storm, Canadian wildfires that led to the closure of oil production as well as ongoing stock withdrawals have resulted in US prices outperforming Brent contracts, pulling down Brent's premium to January lows of around $3 per barrel. .© Thomson Reuters 2015

Oil Up Over $1 on Strong US Demand

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