United States crude oil prices rose more than two per cent on Tuesday in a technical-driven rally boosted by a weaker US dollar and forecasts for a draw on stockpiles of domestic oil products, www.upstreamonline.com reported.
Fresh unrest in eastern Ukraine provided background support for Brent as traders worried that heightened tensions between Moscow and the Western powers might interrupt oil supply from Russia, one of the world’s top oil exporters, Reuters reported.
The US Energy Information Administration said on Tuesday it did not assume that a disruption of oil supply or demand would result from the events in Ukraine.
The US dollar fell to near three-week lows against a basket of six major currencies on Tuesday, which boosted buying of dollar-priced commodities such as oil.
US commercial crude stocks rose last week by 7.1 million barrels, much more than expected, according to preliminary data released by the industry group the American Petroleum Institute. A preliminary poll by Reuters forecast crude stocks rose by just 1.3 million barrels.
US crude oil pared gains slightly in post-settlement trade, falling by 23 cents to $102.31 a barrel in the immediate minutes after the data was released.
However, traders said they remained bullish as they awaited official data from the Energy Information Administration to be released Wednesday at 10:30 a.m. EDT (1430 GMT), that is expected to show that gasoline stocks and stockpiles at the Cushing, Oklahoma, delivery point fell.
Technical trading boosted Brent and US crude prices in addition to the support from fundamentals after both contracts fell to key lows on Monday, and bounced back in Tuesday’s session.
“The seeds to today’s prices were sowed yesterday,” said Walter Zimmermann, chief technical analyst at United-ICAP in New Jersey.
“Both US crude and Brent held exactly, to the penny, to a bull mark correction (level). The reaction to falling to that key level was (they) ricocheted higher.”