Oil Climbs as Firm Demand Absorbs Ample Supply

Oil rose on Tuesday as demand soaked up some of the surplus supplies from OPEC and the United States, but traders said the market was trading in a tight range and showed few signs of big short term moves.

Benchmark Brent crude LCOc1 was up 70 cents at $49.12 a barrel by 1150 GMT, while U.S. light crude oil CLc1 was 65 cents higher at $46.67.

“We’re stuck in a range that … will be tough to break out of without some kind of political factor coming into play,” Matt Stanley, fuel broker at Freight Investor Services, said.

In a sign of strong demand, data on Monday showed refineries in China increased crude throughput in June to the second highest on record.

But many markets are well supplied and oil for prompt delivery is trading at heavy discounts to forward futures in several parts of the world. As a result, crude oil prices are trading at only around half the levels seen three years ago.

A deal by the Organization of the Petroleum Exporting Countries with Russia and other non-OPEC producers to cut supplies by around 1.8 million barrels per day (bpd) between January this year and March 2018 has so far failed to tighten the market or push up prices.

read more/source: https://www.reuters.com/article/us-global-oil-idUSKBN1A305V