US oil prices rise on start of summer driving season

31 May, 2016 8:53 am

SINGAPORE – US oil prices were lifted early on Tuesday by the start of the peak demand summer driving season, although international fuel markets were weighed down by rising output in the Middle East, which mostly serves Asian customers.

US West Texas Intermediate (WTI) crude oil futures CLc1 were trading at $49.50 per barrel at 0042 GMT, up 17 cents from their last settlement.

Demand in North America is set to pick up along with the official start of the US summer driving season this week, triggering a cut in the amount of open short crude positions that would profit from falling prices.

“Investor positioning points to further support for commodity prices as bearish bets continue to be reduced,” ANZ bank said on Tuesday.

The amount of outstanding managed short crude positions of US WTI crude futures 1067651MSHT fell to its lowest level this year last week.

International oil markets, however, were hit by a rise in Middle Eastern crude exports, most of which go to Asia.

Brent crude oil futures LCOc1 were trading at $49.65 a barrel, down 11 cents from their last close.

Iraq will supply 5 million barrels of extra crude to its partners in June, industry sources familiar with the issue said, joining other Middle East producers by lifting market share ahead of an OPEC meeting this week.

Iraq, which is the second-largest producer in the Organization of Petroleum Exporting Countries, had already been targeting record crude export volumes from southern terminals next month of 3.47 million barrels per day.

Saudi Arabia, the world’s top crude exporter, as well as fellow OPEC producers Kuwait, Iran and the United Arab Emirates, also plan to raise supplies in the third quarter in an ongoing race for market share in the world’s biggest consumer region, Asia. -Reuters

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