By Barbara Kollmeyer and Laura He, MarketWatch
MADRID (MarketWatch) — Oil futures shot higher on Tuesday, paring losses from a day earlier as investor optimism grew ahead of weekly data on U.S. crude supplies that’s expected to show a drop in inventories.
Crude oil for January delivery CLF4 +1.25% jumped $1.15, or 1.1%, to $98.48 a barrel in electronic trading.
Brent crude for January delivery UK:LCOF4 +0.05% rose 87 cents, or 0.8%, to $110.26 a barrel. A continuous futures chart from FactSet shows Brent at the highest levels since September.
“WTI has been bought on expectations of another strong week of refinery demand for crude while Brent has been a reluctant follower on news that oil from Libya’s east may soon begin to flow again,” said Ole Hansen, head of commodity strategy at Saxo Bank, in emailed comments. “Upside in WTI seems limited to $100 for the time being not least considering that a Brent Crude price much above $110 seems limited at the moment.”
Oil prices on Monday settled down 0.3% on the New York Mercantile Exchange for their first loss in seven sessions after Federal Reserve officials said the central bank could begin tapering down its stimulus program at its meeting next week.
Oil prices rose 5.3% last week for their best performance since July, according to FactSet data tracking the most-active contracts.
The American Petroleum Institute is due to release its weekly oil inventory report Tuesday at 4:30 p.m. Eastern time, followed on Wednesday by the more closely watched U.S. Energy Information Administration (EIA) weekly data.
U.S. commercial crude oil stocks are expected to have fallen for the second consecutive week, with a draw of 2.8 million barrels during the week ended Dec. 6, a according to a Platts survey of oil analysts.
The previous week, the EIA report showed a larger-than-expected 5.6-million-barrel drop for the week ended Nov. 29, the first decrease in 11 weeks.
Brent crude for January delivery UK:LCOF4 +0.05% rose 87 cents, or 0.8%, to $110.26 a barrel. A continuous futures chart from FactSet shows Brent at the highest levels since September.
Another big mover was January heating oil HOF4 +0.57% , up 1.1%, or 3 cents, to $3.05 a gallon. January natural gas NGF14 +0.78% added 0.1% to $4.14 million British thermal units and gasoline for that month RBF4 +0.59% increased 3 cents to $2.70 a gallon.
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