Oil prices climbed Wednesday amid expectations that the weekly U.S. oil inventory snapshot will show a drop in domestic supplies of gasoline and distillates such as heating oil.
Gasoline prices have risen lately as traders anticipated an increase in gasoline demand in the approaching U.S. summer driving season, coupled with low stocks amid refinery outages in the United States, the world's largest oil consumer.
"Even though the official start is still two months away, (gasoline) prices hit a seven-month high (Monday). Gasoline inventories have fallen about 6 percent since early February, and are expected to fall further," said John Kilduff of Fimat USA, in an overnight note to clients.
Light, sweet crude for May delivery gained 41 cents to US$59.66 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. Brent crude contract for May delivery rose 44 cents to US$60.64 a barrel on the ICE Futures exchange in London.
Analysts polled by Dow Jones Newswires estimated the U.S. Energy Department report due later Wednesday to show, on average, a build of 1.4 million barrels in crude oil stocks. But gasoline inventories were likely to decline by 1.6 million barrels, and distillate supplies which include heating oil and diesel fuel were expected to fall by 1.1 million barrels.
Heating oil futures for April rose nearly a cent to US$1.6784 a gallon (3.8 liters) while natural gas prices gained 2 cents to US$6.930 per 1,000 cubic feet.
The London-based Center for Global Energy Studies, an international energy group, has warned that oil prices would spike in the summer if the Organization of Petroleum Exporting Countries does not increase output. In a report released Monday, it urged OPEC to raise output so refiners have enough crude, reports AP.
Late last year, OPEC member nations pledged to shore up falling oil prices by reducing their oil output by 1.7 million barrels a day. The group decided last week to maintain present production targets.