Analysts polled by Reuters have forecast a decline of 2.7 million barrels in USA crude last week while trade group American Petroleum Institute has indicated the drop could be as large as 3.6 million barrels.
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West Texas Intermediate for July delivery was trading at $50.04 a barrel, up 35 cents, on the New York Mercantile Exchange at about 8:50 Central time.
“The loss of supply from Nigeria is highly important on several accounts”, said Bjarne Schieldrop, chief analyst at Commodities SEB Markets.
This week’s boost in prices can be attributed partially to unrest in Nigeria, where militants have attacked oil facilities, causing supply disruptions, according to JBC Energy analysts.
Nigerian Oil Minister Emmanuel Ibe Kachikwu said output had dropped to 1.5-1.6 million barrels per day (bpd), down from 2.2 million at the start of the year.
Beijing’s crude imports showed the biggest year-on-year increase in more than six years. Growing global oil supply disruptions, rising oil demand, and falling US crude oil production contributed to the price increase, EIA said.
Prices have almost doubled since hitting 13-year lows earlier this year as companies have slashed spending on new drilling, and unplanned outages in Nigeria and Canada helped reduce the global oversupply of crude.
“With Brent staying above US$50, oil is on an upward momentum with the restart of French refineries that were shut on strikes and pipeline attacks in Nigeria”, said Kaname Gokon at brokerage Okato Shoji in Tokyo.
“With the industry projecting a decline in total USA crude oil stocks in this week’s reports, the market bears are remaining on the sidelines”.
Oil prices rose to fresh highs for the year, supported by easing concerns about a supply glut.
Investors are watching for official data to be released by the US Government to indicate weekly oil stock numbers. In 2015, United States oil production averaged 9.4 million barrels per day, according to the EIA’s estimates.
The dollar hovered near four-week lows against a basket of currencies as traders speculated when the Federal Reserve may raise interest rates following comments from Fed Chair Janet Yellen on Monday and a weak May jobs report on Friday.
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“The risk for prices remains on the upside as new highs attract more buyers who don’t want to miss the train”, Michael Poulsen, an analyst at Global Risk Management Ltd, said by e- mail.
