Oil turned sharply positive Tuesday as heating oil and gasoline surged.
Prices fell earlier in the session as the impact of a supply glut and a stronger dollar offset strong European economic data and optimism that a deal will be struck between Greece and its creditors.
RBOB Gasoline rose more than 1.5 percent, while ultra-low sulfur diesel jumped about 2 percent.
Brent crude rose 83 cents at $64.17 a barrel at 11:20 a.m. EDT (1520 GMT), after closing the previous session up 32 cents.
U.S. crude for August delivery was up 56 cents to $60.94 a barrel. The July contract, which expired on Monday, closed up 7 cents at $59.68 a barrel.
Oil turned sharply positive Tuesday as heating oil and gasoline rallied.
Prices fell earlier in the session as the impact of a supply glut and a stronger dollar offset strong European economic data and optimism that a deal will be struck between Greece and its creditors.
RBOB Gasoline rose more than 1.5 percent, while ultra-low sulfur diesel jumped about 2 percent.
Brent crude rose 83 cents at $64.17 a barrel at 11:20 a.m. EDT (1520 GMT), after closing the previous session up 32 cents.
U.S. crude for August delivery was up 56 cents to $60.94 a barrel. The July contract, which expired on Monday, closed up 7 cents at $59.68 a barrel.
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Strong European economic data supported prices despite a heavy global surplus of oil which has led to millions of barrels being afloat at sea as sellers struggle to find buyers for cargoes.
France’s manufacturing sector expanded in June for the first time since April 2014, while Germany’s private sector grew at a faster rate in June than in the previous month.
“The data from France and Germany show there are flickers of life in the European economy, but strong supply is likely for some time to come, meaning subdued oil prices,” said Michael Hewson, chief market analyst at CMC Markets.
A stronger dollar pressured the oil price. The dollar index was up 1 percent, while the euro shed 1.3 percent against the greenback. Oil, denominated in the U.S. currency, becomes less affordable to holders of other currencies when the dollar strengthens.
Expectations for a weekly drawdown in U.S. crude stocks also helped support prices. Analysts expect U.S. commercial crude oil stocks to have dropped by an average of 1.8 million barrels to around 466 million barrels last week.
The American Petroleum Institute, an industry group, will release its data on U.S. stocks on Tuesday at 4:30 p.m. (2030 GMT), while the U.S. government’s Energy Information Administration will publish its own inventories data on Wednesday at 10:30 a.m. (1430 GMT).
Investors are also watching to see the speed with which Iran could increase oil exports if there is a deal between Tehran and six world powers over Iran’s nuclear programme, a move that would likely lift Western sanctions.
Iranian Foreign Minister Mohammad Javad Zarif said he saw a good chance of reaching a final agreement with six world powers on Iran’s nuclear programme by a June 30 deadline or a few days later, provided there was political will.
Source: Reuters
