US crude oil closes at 2014 high

New York (AFP) – Crude oil closed solidly higher Tuesday, with the S&P Futures contract hitting their highest point so far this year on expectations of a decline in US production.

The US benchmark, West Texas Intermediate for May delivery, rose $ 1.84 to finish at $ 53.98 a barrel on the New York Mercantile Exchange, the highest close since December 30, at $ 54.12.

In London trade, Brent North Sea crude for May, the global benchmark, settled at $ 59.10 a barrel, up 98 cents from Monday.

Both contracts clawed back from losses to end trade firmly in positive territory, extending Monday’s hefty $ 3 gains after the nuclear framework deal last week between Iran and major powers was seen as having a minimal near-term effect on global crude supplies.

Traders looked ahead to Wednesday’s weekly US Department of Energy inventories report. Analysts expected it would show another rise. But they also expect that US crude production, at over nine million barrels per day, would dip for the second week in a row.

“Oil bulls got a boost after Genscape reported that Cushing Oklahoma oil supply increased by a much smaller than expected 169,000 barrels in the week to April 3,” said Phil Flynn, an analyst at Price Futures Group.

Flynn said the energy data provider’s report was further evidence that concerns about supplies testing the capacity at the key Cushing storage hub “have been overblown”.

Analysts said the oil market also continued to be underpinned by news that Saudi Arabia had raised crude oil prices for Asia.

“Demand for oil is obviously starting to recover in Asia, enabling Saudi Arabia to offer its oil at smaller discounts,” Commerzbank said in a research note.