SINGAPORE: Oil prices rose on Wednesday to hold near 2015 highs, continuing a month-long rally that was supported by a weaker dollar and a disruption to crude exports in Libya.
Oil bulls have pushed prices higher this week, after a rally of between 20 percent and 25 percent in April, despite a continued build in U.S. crude stockpiles and indications that the OPEC cartel will keep production at current high levels at a meeting next month.
Brent crude for June delivery was 32 cents higher at $67.87 a barrel by 0141 GMT, below its 2015 peak of $68.40 reached on Tuesday, when the contract ended up $1.07.
U.S. crude for June delivery traded 50 cents higher at $60.90 a barrel. The contract closed up $1.47 on Tuesday, after hitting a 2015 high of $61.10.
“Stronger European demand now appears to have been the key catalyst that allowed refineries to lift utilization (in 1Q) and absorb surplus crude while maintaining strong refining margins,” analysts at JP Morgan said in a note.
The bank raised its average 2015 Brent forecast by $3 to $62 a barrel and its average 2016 forecast by $10 to $72 a barrel, “as tighter balances are expected to reduce OPEC spare capacity through 2016.”
The recent price rally has muted calls from OPEC members to cut supply, with the cartel set to maintain production levels at a June 5 meeting, three delegates said.
In a sign that Middle East producers continue their fight for market share in Asia, top exporter Saudi Arabia said on Tuesday it would keep prices for its flagship crude unchanged at a discounted level for Asian buyers in June.
U.S. crude inventories likely continued to rise last week for the 17th consecutive week, according to a Reuters poll showing a build of 1.5 million barrels.
But a report from industry group American Petroleum Institute suggested that U.S. crude inventories fell by 1.5 million barrels last week, for the first time this year.
The U.S. Energy Information Administration will issue official stockpiles at 1430 GMT on Wednesday.