NEW YORK: Brent crude oil rose 2 percent on Tuesday, June 7 lifted by a weaker dollar and Middle East conflicts that also pushed its premium to U.S. crude to a record above $17 a barrel.
U.S. crude settled slightly higher after seesawing, hemmed in by news that Saudi Arabia planned to raise output in June regardless of the result of OPEC's Wednesday meeting.
Investors tried to assess whether the Organization of the Petroleum Exporting Countries would raise its production target only to codify current output above targets, or to signal intent to boost actual output and not just the target.
The U.S. dollar .DXY fell against a basket of currencies after a senior Chinese currency regulator warned about the risks of excessive dollar holdings.
U.S. stocks gave up gains and fell for a fifth straight session after Federal Reserve Chairman Ben Bernanke acknowledged a slowdown in the economy, but did not suggest further monetary stimulus to spark growth.
"OPEC raising production may already be priced in and Brent gets a lift from the euro strength and the weak dollar, and that market is more immediately affected by potential supply threats in the Middle East," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
Brent crude for July delivery rose $2.30 to settle at $116.78 a barrel, recovering from an early $113.80 low.
U.S. July crude edged up 8 cents to settle at $99.09 a barrel. Prices hit $99.75 in post-settlement trading, inching above front-month crude's 100-day moving average of $99.73.
Trading volumes for Brent and U.S. contracts outpaced 30-day and 250-day averages.
U.S. gasoline and heating oil futures also rose sharply, lifted by Brent's strength and refinery problems, particularly on the Texas Gulf Coast.
Brent's premium to the U.S. light, sweet crude contract neared $18 a barrel, amid high inventories in the United States, especially at the Cushing, Oklahoma oil hub and delivery point for the U.S. benchmark West Texas Intermediate (WTI) crude.
"It is the same old story. Oversupply in Cushing keeping WTI depressed while Brent is being used as an inflation hedge ... North Sea fundamentals are better than WTI as there have been some problems with Forties (crude) production," said Tom Bentz, director of BNP Paribas Commodity Futures in New York.
U.S. OIL INVENTORIES
U.S. crude oil stockpiles fell 5.5 million barrels last week, with Cushing stocks down 1.5 million barrels, the American Petroleum Institute industry group said in a report late on Tuesday.
Gasoline inventories fell 390,000 barrels and distillate stocks rose 1.8 million barrels, the API said.
Oil prices edged higher in post-settlement trading after the report. Crude stocks had been forecast down only 300,000 barrels, with distillate stockpiles unchanged and gasoline stocks up 1 million barrels, according to a Reuters poll of analysts ahead of the API report.
A similar report from the U.S. Energy Information Administration follows on Wednesday at 10:30 a.m. EDT (1430 GMT).
OPEC TO MEET, MIDDLE EAST IN TURMOIL
Saudi Arabia expects to lift output by more than 500,000 barrels a day in June, a senior Gulf industry official familiar with Saudi oil policy told Reuters.
Riyadh wants OPEC to hike its target but so far only has the support of its allies Kuwait and the United Arab Emirates among the 12-member cartel.
While OPEC prepared to meet in Vienna, turmoil continued in Yemen, neighbor to Saudi Arabia, and Syria, while NATO aircraft hit Libya's capital. - Reuters
U.S. crude settled slightly higher after seesawing, hemmed in by news that Saudi Arabia planned to raise output in June regardless of the result of OPEC's Wednesday meeting.
Investors tried to assess whether the Organization of the Petroleum Exporting Countries would raise its production target only to codify current output above targets, or to signal intent to boost actual output and not just the target.
The U.S. dollar .DXY fell against a basket of currencies after a senior Chinese currency regulator warned about the risks of excessive dollar holdings.
U.S. stocks gave up gains and fell for a fifth straight session after Federal Reserve Chairman Ben Bernanke acknowledged a slowdown in the economy, but did not suggest further monetary stimulus to spark growth.
"OPEC raising production may already be priced in and Brent gets a lift from the euro strength and the weak dollar, and that market is more immediately affected by potential supply threats in the Middle East," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.
Brent crude for July delivery rose $2.30 to settle at $116.78 a barrel, recovering from an early $113.80 low.
U.S. July crude edged up 8 cents to settle at $99.09 a barrel. Prices hit $99.75 in post-settlement trading, inching above front-month crude's 100-day moving average of $99.73.
Trading volumes for Brent and U.S. contracts outpaced 30-day and 250-day averages.
U.S. gasoline and heating oil futures also rose sharply, lifted by Brent's strength and refinery problems, particularly on the Texas Gulf Coast.
Brent's premium to the U.S. light, sweet crude contract neared $18 a barrel, amid high inventories in the United States, especially at the Cushing, Oklahoma oil hub and delivery point for the U.S. benchmark West Texas Intermediate (WTI) crude.
"It is the same old story. Oversupply in Cushing keeping WTI depressed while Brent is being used as an inflation hedge ... North Sea fundamentals are better than WTI as there have been some problems with Forties (crude) production," said Tom Bentz, director of BNP Paribas Commodity Futures in New York.
U.S. OIL INVENTORIES
U.S. crude oil stockpiles fell 5.5 million barrels last week, with Cushing stocks down 1.5 million barrels, the American Petroleum Institute industry group said in a report late on Tuesday.
Gasoline inventories fell 390,000 barrels and distillate stocks rose 1.8 million barrels, the API said.
Oil prices edged higher in post-settlement trading after the report. Crude stocks had been forecast down only 300,000 barrels, with distillate stockpiles unchanged and gasoline stocks up 1 million barrels, according to a Reuters poll of analysts ahead of the API report.
A similar report from the U.S. Energy Information Administration follows on Wednesday at 10:30 a.m. EDT (1430 GMT).
OPEC TO MEET, MIDDLE EAST IN TURMOIL
Saudi Arabia expects to lift output by more than 500,000 barrels a day in June, a senior Gulf industry official familiar with Saudi oil policy told Reuters.
Riyadh wants OPEC to hike its target but so far only has the support of its allies Kuwait and the United Arab Emirates among the 12-member cartel.
While OPEC prepared to meet in Vienna, turmoil continued in Yemen, neighbor to Saudi Arabia, and Syria, while NATO aircraft hit Libya's capital. - Reuters
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