By Yuka Obayashi
TOKYO (Reuters) – Oil prices rose on Tuesday, extending the previous day’s rally on hopes of greater seasonal demand for fuel and potential purchases of U.S. oil for its oil reserve, although the gains were limited by a firmer dollar.
Brent crude futures were up 28 cents, or 0.3%, at $81.91 per barrel by 00:38 GMT and West Texas Intermediate crude futures were up 31 cents, or 0.4%, at $78. 05.
Prices rose about 3% to a one-week high on Monday, driven by expectations of increased fuel demand this summer, despite the dollar rising on expectations that the US Federal Reserve will leave interest rates on hold. higher for longer.
“The oil market was supported by the anticipation of increased fuel demand this summer and the prospect that if WTI remains below $79, the US will move to increase its strategic reserves,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
“As WTI is close to its 200-day average, we expect oil prices to remain near current levels for some time,” he said.
The U.S. could accelerate the pace of replenishing the Strategic Petroleum Reserve once stockpile maintenance is completed by the end of the year, Energy Secretary Jennifer Granholm told Reuters last week. It wants to buy back oil at around $79 per barrel.
Meanwhile, Goldman Sachs analysts said they expect Brent to rise to $86 per barrel in the third quarter, noting in a report that solid summer shipping demand will push the oil market into a deficit in Q3 2020. 3 million barrels per day (bpd). .
Investors’ attention is on the release of U.S. consumer price index data for May and the conclusion of the Fed’s two-day monetary policy meeting on Wednesday for hints on when the Fed might begin reducing rates. interest rates.
The market is also paying attention to reports from the American Petroleum Institute industry group, which will be released later on Tuesday, and the Energy Information Administration, the statistical arm of the US Department of Energy, which will be released on Wednesday.
U.S. crude oil inventories are expected to have fallen, while product inventories likely rose last week, a preliminary Reuters poll showed on Monday.
Investors also await monthly oil supply and demand data from the US Energy Information Administration (EIA) and OPEC on Tuesday and the International Energy Agency (IEA) on Wednesday.
(Reporting by Yuka Obayashi; Editing by Sonali Paul)
