By Yuka Obayashi
TOKYO (Reuters) – Oil prices rose on Tuesday, extending the previous day’s rise on hopes of higher seasonal demand for fuel and potential purchases of crude by the United States for its oil reserves , although gains were capped by a firmer dollar.
Brent crude futures rose 28 cents, or 0.3 percent, to $81.91 a barrel by 0038 GMT and U.S. West Texas Intermediate crude futures rose 31 cents, or 0 .4%, to $78.05.
Prices rose about 3% to a one-week high on Monday, supported by expectations of higher fuel demand this summer despite the dollar rising on expectations that the U.S. Federal Reserve would let higher interest rates for longer.
“The oil market was supported by expectations of higher fuel demand this summer and the prospect that if WTI remains below $79, the United States will work to build up its strategic reserves” , said Hiroyuki Kikukawa, president of NS Trading, a division of Nissan Securities.
“As WTI is near its 200-day average, we expect oil prices to remain near their current levels for some time,” he said.
The United States could accelerate the process of replenishing its strategic oil reserves as stockpile maintenance is completed by the end of the year, the US Secretary of State told Reuters last week. ‘Energy, Jennifer Granholm. He wants to buy oil at around $79 per barrel.
Analysts at Goldman Sachs, meanwhile, said they expected Brent to rise to $86 a barrel in the third quarter, noting in a report that strong summer shipping demand would push the oil market into a deficit of 1.3 million barrels per day (bpd) in the third quarter. .
Investor attention is focused on the release of U.S. Consumer Price Index data for May and the conclusion of the Fed’s two-day policy meeting on Wednesday for guidance on when the Fed might start reducing interest rates.
The market is also awaiting reports from the American Petroleum Institute industry group, due later Tuesday, and the Energy Information Administration, the statistical arm of the U.S. Department of Energy, due Wednesday.
U.S. crude oil inventories are expected to have fallen while petroleum product inventories likely increased last week, according to a preliminary Reuters survey released Monday.
Investors also await monthly oil supply and demand data from the U.S. Energy Information Agency (EIA) and OPEC on Tuesday and the International Energy Agency (IEA) Wednesday.
(Reporting by Yuka Obayashi; editing by Sonali Paul)
