Oil prices rise on US supplies, Libya deal skepticism
Oil prices advanced Wednesday after a US supply report showed strong gasoline demand.
NEW YORK (AFP) - Oil prices advanced Wednesday after a US supply report showed strong gasoline demand and as questions persisted about a full resumption of Libyan oil exports.
US benchmark West Texas Intermediate for May delivery rose $1.04 to $103.60 a barrel on the New York Mercantile Exchange.
In London. Brent oil for May delivery added 31 cents to $107.98 a barrel.
The Energy Information Administration said US crude supplies jumped 4.0 million barrels for the week ended April 4, well above the 1.0 million forecast by analysts surveyed by the Wall Street Journal.
However, analysts fixated on a drop of 5.2 million barrels of gasoline supplies, much more than the 700,000 barrel decline that had been projected.
"We're definitely seeing oil demand on the rise," said Carl Larry, an analyst with Oil Outlooks and Opinions.
Larry said Wednesday's minutes from the March policy meeting of the US Federal Reserve also suggested that the Fed is in no rush to raise benchmark interest rates.
"We're going to have this soft monetary policy for some time and that's going to give consumers and commercial producers a chance to keep growing and that's going to increase oil demand," Larry said.
Analysts were also taking a cautious view of a weekend deal between rebels in eastern Libya and the central government to resolve a nine-month oil blockade.
Under the deal reached Sunday, the rebels are to hand over two of the four terminals in eastern Libya they control this week and will cede the other two within two to four weeks provided the negotiations are successfully concluded.
Rebels Wednesday ceded control of the Al-Hariga terminal, enabling exports to resume as early as Sunday.
But Tim Evans, energy futures specialist at Citi Futures, said the oil market views the Libya progress as "inconclusive," in part because a full transition of control of all of the ports has still not been completed.
