April 5 (UPI) -- Crude oil prices extended their streak into Wednesday on signs that global markets were tightening, though some supply pressures could start to play a factor.
Crude oil prices were supported Tuesday by evidence that some of the supply-side pressures lingering in the United States, the world's No. 1 economy, were starting to fade. Markets were tightened further by reports of an unplanned outage at the Buzzard oil field in the British waters of the North Sea.
Stephen Brennock a broker with PVM said in a daily newsletter the sentiment for traders is now bullish. The American Petroleum Institute reported late Tuesday that U.S. crude oil inventories were down 1.8 million barrels, far lower than predicted by some analysts, and gasoline inventories declined 2.6 million barrels.
"Attention will now turn to today's forthcoming U.S. Energy Information Administration report concerning inventories," he wrote. "Should it confirm that U.S. crude stocks did indeed fall for what would only be the second time this year, it will mark the start of a sustained tightening in US crude supplies."
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The price for Brent crude oil was up 1.18 percent about a half hour before the start of trading in New York to $54.81 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.23 percent to $51.67 per barrel.
The rally could be supported if official government data confirms employment figures from payroll processor ADP. Between February and March, ADP reported private-sector employment increased by 263,000.
Supply issues could drag on the rally for crude oil prices. An outage in Libya, a member of the Organization of Petroleum Exporting Countries exempt from a production deal, pushed oil prices higher last week, but gains evaporated by Monday on signs of recovery.
After meeting with international oil executives, Mustafa Sanalla, the head of Libya's National Oil Corp., said production is expected to increase by another 50,000 barrels per day within the next few weeks.
"The NOC is working hard with all its partners to increase the Libyan oil production to 1.1 million barrels per day by next August," he said.
