Oil held steady above $68 a barrel today after climbing to the highest in over three weeks in the previous session, as Asian stock markets took a breather from their rally.
Prices had jumped to $68.99 yesterday, the highest since July 2nd, spurred by robust US homes sales data that raised optimism for an economic recovery.
The market is now looking to Friday's US GDP data, expected to show a fourth-straight quarter of contraction.
US crude edged up 10 cents to $68.48 a barrel by 5.40am Irish Time, after surging towards $70 yesterday, as gasoline and heating oil futures rose for the 10th consecutive session. London Brent crude rose 8 cents to $70.89 barrel.
Hopes that the global economy would emerge from the recession and lift falling oil demand have helped push crude prices up from below $33 a barrel in December, where it had fallen from record peaks near $150 hit in July last year.
Major Asian stock markets paused today after surging about 16 per cent over two weeks, but sentiment remained supported by hopes of strong corporate results in the region and expectations of a recovery in the US economy.
Investors are also keeping an eye on US. weekly oil inventories, in which a Reuters poll forecast a 300,000-barrel drop in crude stocks and a 600,000-barrel fall in gasoline. But distillates stocks are projected to have risen by a hefty 1 million barrels.
The American Petroleum Institute data is scheduled for release later today while the report from the US Energy Information Administration (EIA) is due out tomorrow.
The oil markets remain clouded by fears of poor global demand for diesel and jet fuel, with volumes stored at sea rising by 10 million barrels since mid-June to 72 million barrels, enough to meet 85 per cent of daily global demand.
On the supply side, Saudi Aramco's oil output capacity touched 12 million barrels per day last month when three new oilfield projects started, one of which is the Shaybah oilfield expansion, the al-Hayatnewspaper reported the firms's chief executive as saying.
CEO Khalid al-Falih was also confident that the global fall in oil demand was temporary and consumption growth would eventually resume.
Reuters