Crude oil jumps to 3-week high, above USD96 a barrel

Forex Pros – pros – Crude oil futures advanced on Tuesday, jumping to a three-week high amid easing concerns about oversupply and after Barclays and Deutsche Bank both upgraded their oil price forecasts. 

On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD96.70 a barrel during U.S. morning trade, jumping 1.8%.         

It earlier rose as much as 1.9% to hit USD96.81 a barrel, the highest price since June 15.

The U.S. Department of Energy said earlier that it sold 30.2 million barrels of sweet crude from the country's Strategic Petroleum Reserve in an auction last Friday, as part of the release of emergency reserves from the International Energy Agency.

The DoE said the sale was “substantially oversubscribed”, underscoring demand for light, sweet crude.

Barclays said in a report earlier that it upgraded its average 2012 crude price forecast to USD110 a barrel from a previous estimate of USD106 a barrel. The lender raised its 2012 Brent price forecast to USD115 a barrel from USD105.

 

According to the bank, global oil demand will increase by 1.38 million barrels a day in 2012 to average 90.6 million, with the main sources of demand growth expected to be China, India, Saudi Arabia and Brazil.

Meanwhile, Deutsche Bank raised their crude oil price forecast for the second half of 2011 to USD100 a barrel, saying it believed physical oil fundamentals still remained strong.

However, the German lender cut its Brent price forecast to USD114 a barrel in the second half of 2011, down from a previous forecast of USD117.5, citing weaker economic growth in the euro zone.

Crude futures initially traded lower Tuesday, dipping to a two-day low of USD94.35 a barrel as concerns over a possible rate hike by China weighed.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for August delivery gained 1.23% to trade at USD112.81 a barrel, up USD16.11 on its U.S. counterpart.

Weekly U.S. oil inventory data from industry group the American Petroleum Institute and the government's Department of Energy will be delayed by a day to Wednesday and Thursday respectively, due to Monday's Independence Day holiday.

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