CRUDE oil price rose further above $45 a barrel on Tuesday as forecasts for a drop in United States inventories and speculation of producer action to prop up prices countered concern about a supply glut.
US crude inventories were expected to have fallen by one million barrels in weekly reports, although market intelligence firm, Genscape, reported a rise of more than 307,000 barrels at the Cushing, Oklahoma delivery hub for US oil, traders said.
Brent crude for October LCOc1 was up seven cents at $45.46 a barrel by 1341 GMT (0941 ET), after rising $1.12 on Monday. The global benchmark fell nearly 15 per cent in July. U.S. crude for September CLc1 was up 19 cents at $43.21.
“One can only wonder how long this enthusiasm will last considering the oversupplied fundamental backdrop,” said Tamas Varga of oil broker PVM. “Current oil price strength does not feel justified.”
Comments by OPEC President, Mohammed Al-Sada, may have helped the gain on Monday. Its president said in a rare statement that the market was on the path to rebalancing and a drop in prices would be temporary.
OPEC sources have been saying since June that renewed talks about a global output freeze could take place in September, when most members, plus non-members such as Russia, are expected to attend an International Energy Forum meeting in Algeria.
However, Nigeria seems not to be making best use of the marginal increase in crude oil price due to unrest and incessant attacks on its oil installations in the Niger Delta.
The ongoing dialogue among members of the militancy groups may end the attacks and allow the country to benefit from the potential upswing in the crude price in near future.