Oil prices cement gains

2 min
Advertising

London (AFP)

Oil prices firmed Wednesday after the previous day's rally and as traders awaited official data on the levels of US energy inventories.

Around 1130 GMT, US benchmark West Texas Intermediate for delivery in June was 34 cents higher at $45.86 a barrel.

Brent North Sea crude for July edged up seven cents to $44.73 a barrel compared with Tuesday's close.

Brent surged by almost two dollars on Tuesday, as traders focused on lingering oil producer shutdowns in Canada and plummeting output in Nigeria.

In a volatile trading week so far, crude tumbled Monday on news that Canadian wildfires failed to inflict long-term damage on key oilfield infrastructure.

But market sentiment became more bullish again on Tuesday, as investors concluded that the production outages in the Alberta oil sands region could persist a while longer, even if facilities were not seriously damaged and the worst of the fires was over.

"The sentiment around traders in the market is that they do think the disruptions are a temporary obstacle," said CMC Markets senior trader Alex Wijaya.

"Longer-term, should oil companies resume production, they are expecting oil prices to hover around $40," Wijaya told AFP.

Investors were meanwhile waiting for Wednesday's release by the US Energy Information Administration of its stockpiles report for an updated indication of crude demand in the world's biggest oil consumer.

A report Tuesday from the private American Petroleum Institute indicated inventories had risen last week.