Benchmark crude prices rose to hover just under US$57 a barrel Tuesday as traders responded to a drop the day before. But buying was light as the market looked for longer-term direction.
Light, sweet crude for April delivery rose 24 cents to US$56.83 a barrel by midday in European electronic trading on the New York Mercantile Exchange. The April contract, which expires Tuesday, fell 52 cents the day before amid expectations of rising crude stocks.
On London's ICE Futures exchange, May Brent crude gained 46 cents to US$60.84 a barrel.
"Prices have really kicked up today but with light volume and no real drivers," said Tobin Gorey, a commodity strategist at Commonwealth Bank of Australia in Sydney.
He suggested the rise was an exaggerated response to Monday's drop and that the market would readjust as the day progressed.
Prices for futures contracts were also rising as traders anticipated an increase in gasoline demand in the approaching U.S. summer driving season. U.S. refineries are expected to boost their crude oil runs by 1.5 million barrels per day to 16.1 million barrels daily by June to meet summer driving demand.
Following that trend, gasoline futures also jumped Monday to US$1.9581 a gallon after trading as high as US$1.97 - their highest level since last September.
Vienna's PVM Oil Associates attributed what it said was a more than 44 percent rise in U.S. gasoline prices since mid-January to "healthy demand, lower imports and planned and unplanned refinery outages."
Amid the drift, an international energy group warned of a sharp spike in oil prices if the Organization of Petroleum Exporting Countries does not increase output.
"OPEC's complacency in Vienna has set the scene for another upward price spiral," the London-based Centre for Global Energy Studies said Monday in its monthly oil report. It urged OPEC to raise output so refiners have enough crude.
Late last year, OPEC member nations pledged to shore up falling oil prices by reducing their oil output by 1.7 million barrels a day. The group decided last week to maintain present production targets at its meeting in the Austrian capital, reports AP.
Heating oil rose by more than a cent to US$1.7025 a gallon (3.8 liters) on the Nymex, while natural gas rose 5.1 cents to US$6.898 per 1,000 cubic feet.
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