Crude Oil Prices Settle Higher on Expectations for Draw in US Supplies

Investing.com – Crude oil prices settled modestly higher Tuesday, recovering from nearly one-month lows intraday as traders turned attention to U.S. data expected to show another draw in stockpiles.

On the New York Mercantile Exchange for August delivery rises 2 cents to settle at $68.08 a barrel, while on London’s Intercontinental Exchange, climbed 49 cents to trade at $72.33 a barrel.

The slump in oil prices to an nearly one-month low of $66.38 intraday triggered a wave of buying on expectations for weekly inventory data to show US supplies fell for a second-straight week.

The American Petroleum Institute, an industry group, releases its report at 4:30 p.m. ET, followed by the Energy Information Administration’s report Wednesday at 10:30 a.m. ET.

The rebound in WTI crude prices comes amid renewed supply disruptions in Venezuela, and day after oil observers appeared to trim their bets on a global supply shortage.

Two of Venezuela’s four crude upgraders are slated to undergo a period of maintenance in the next few weeks. The units are capable of processing a combined 700,000 barrels per day, Reuters reported.

Reports that the U.S. is considering releasing strategic petroleum reserves, and has softened its stance toward Iranian crude importers amid renewed exports from Libya has scaled back expectations for a global supply shortage.

Libya’s output rose to 650,000 to 700,000 barrels a day and is expected to rise further after shipments resumed at eastern ports, Bloomberg reported Tuesday, citing a person familiar with the situation.

Yet Goldman Sachs said recently that it continues to expect a deficit in crude supplies as global crude inventories are low and oil demand remains robust.

The bank maintained its Brent price forecast range of $70 to $80 a barrel, but added prices will remain volatile.

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