NEW YORK (Reuters) - Oil prices hit their highest for the year on Tuesday, aided by a disruption in Libyan crude exports, higher selling prices for Saudi oil and a weaker dollar that tends to inflate commodity prices.
Since April’s price rally of between 20 and 25 percent, oil bulls have been pushing the market up on the notion that a supply glut was easing from tightening world production despite continuous builds in U.S. crude stockpiles.
U.S. crude CLc1 settled up $1.47 at $60.40 a barrel, after hitting a 2015 high of $61.10.
Brent LCOc1, a more widely-used oil benchmark, settled up $1.07 to $67.52, after scaling the year’s peak at $68.40.
Still, some were not convinced the recent price gains would have much staying power.
“I think the market is getting ahead of itself,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
“There’s plenty of producer hedging going on as well, and those production levels are not going to come down if demand projections are not met. This could simply mean we are setting ourselves up for another leg lower in prices,” Chirichella said.
On Tuesday, North Sea crude differentials weakened from a sizeable volume of unsold loading supplies in May.
A Reuters poll showed U.S. crude stockpiles had risen 1.6 million barrels last week to hit record highs for a 17th consecutive week.[EIA/S]
Industry group American Petroleum Institute will reveal its own expectations for U.S. crude inventories at 4:30 p.m. EDT on Tuesday, before official data due from the government on Wednesday.
Crude prices have risen 50 percent in just over three months, after the June-to-January selloff hammered the market down to around $40 a barrel from last summer’s highs above $100.
Protests stopped crude flows to the eastern Libyan port of Zueitina on Tuesday. Libyan output is below 500,000 barrels per day, a third of what the country pumped before 2010.
The dollar fell on a mixed batch of U.S. economic data, boosting commodities denominated in the currency. [USD/]
Saudi Arabia raised official selling prices for its Arab Light grade crude to Northwest Europe to reflect a price rally in rival grades in recent weeks.
Some argue the market remains oversupplied, with the Organization of the Petroleum Exporting Countries pumping almost 2 million bpd above demand.
OPEC meets next month to discuss production policy. Analysts see little chance it will restrain output as members battle for market share.
Additional reporting by Christopher Johnson in London and Jessica Jaganathan in Singapore; Editing by Keith Weir, Chris Reese and Marguerita Choy