Oil rose for the third straight session as OPEC forecast greater crude demand this year than previously expected and projected less supply from countries outside the organization.
The organization of Petroleum Exporting Countries forecast demand for oil will be an average 29.21 million barrels a day, up 430,000 barrels per day from the previous forecast while cutting its outlook for supply of crude in non-OPEC countries.
Last week, data showing the US rig count at a low of three years bolstered the prices, which were trying to get a floor after a brutal selloff in crude.
According to Reuters, benchmark Brent oil futures rose 35 cents or half a cent to $58.15 per barrel after revisiting the one-week peak of Friday at $59.06.
US crude futures climbed 3% or $1.30 to $52.99 after climbing $53.40 earlier.
Genscape, oil services firm had estimated a smaller-than-expected build of 724,000 barrels last week, adding to the bullish sentiment.
Anuraag Shah, portfolio manager at Tusker Investment Fund said, “It was mainly hedge fund, speculator driven and smacks of price-overshooting. We are just undergoing consolidation and technical short-covering, reaching maybe up to $56 to $59 in US crude.”
Tariq Zahir, managing member at Tyche Capital Advisors said, “We are not turning long in any way. All rallies, we feel, will be sold into.”
CNBC quoted Tribly Lunberg, survery publisher as having said, “Crude oil hit a bottom and has had a moderate rebound that has worked its way partially to the gas pumps.”
Average price of gasoline per gallon in the US rose 13 cents in the last two weeks, after a nine-month drop in price.
Citigroup said in a note that prices for US crude might drop below $40, “perhaps as low as the $20 range for a while.”
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