Brent oil extended gains toward $57 a barrel as Citigroup Inc. raised its price outlook citing strong OPEC compliance with agreed output cuts and growing demand in Asia. Futures rose 1.3 percent in London. Brent will average $55 this quarter, Citigroup said in a note, an increase of $5 from its previous forecast. The North Sea price benchmark is poised for its biggest shakeup in a decade with a new grade added to the mix from January. WTI for March delivery, which expires Tuesday, was 79 cents higher at $54.19 a barrel on the New York Mercantile Exchange. click Read More below for more of the story
Oil futures extended gains in early Asian trade on Wednesday as US crude and gasoline inventories fell more than expected and the Energy Information Administration (EIA) raised its 2015 oil demand growth forecast.
Front-month Brent crude futures rose 23 cents to USD 65.11 a barrel by 0154 GMT. US crude climbed 54 cents to USD 60.68 a barrel.
The gains came after prices for crude oil, gasoline and diesel jumped more than 3 percent on Tuesday as bullish investors made bets across the oil complex for another weekly drop in US stockpiles.
“Crude oil prices rallied strongly overnight. US weekly crude oil inventories fell by a large 6.7 million barrels compared with expectations for a decline of less than 2 million barrels,” ANZ bank said in a morning note on Wednesday.
“US weekly gasoline stocks also fell according to API, with gasoline stocks falling by 3.87 million barrels vs a Reuters poll of analysts expecting an increase of 280,000 barrels,” it added.
The US government’s Energy Information Administration (EIA) will issue official inventory data on Wednesday.
On the demand side, the EIA on Tuesday raised its 2015 world oil demand growth forecast by 20,000 barrels per day to 1.25 million bpd.
Despite the rallies this week, analysts said that big further gains were unlikely and that prices could start falling again as a global oversupply of crude remains in place.