Snapping a prolonged losing streak, oil prices edged higher on Tuesday as a drop in US crude oil supplies eased fears over a supply glut.
The industry-funded American Petroleum Institute (API) reported a draw of 1.9 million barrels in US crude oil stockpiles last week.
Traders weighed mostly upbeat US economic data which showed that private sector growth accelerated in July, home prices continued to rise in May, albeit at a slightly slower pace, and a regional manufacturing gauge picked up steam, signaling strong progress in the world’s biggest economy, lifting the demand outlook for the fuel.
A combined gauge measuring US manufacturing and services climbed to 55.2 in July from 54.6 in June, with a reading above 50 signaling expansion. Home prices in 20 US leading cities climbed 4.9 per cent, year on year in May 2015, while manufacturing activity in the Central Atlantic region accelerated as the Fed Richmond manufacturing index climbed to 13 this month from 7 in June, with a reading above zero signaling expansion.
However, consumer sentiment in the US plunged in July with the confidence index slipping to 90.9 from a revised 99.8 in June, dampening some of the optimism over US economic growth, and trimming gains in Oil.
Crude oil may extend gains today ahead of the EIA data which may show a drop in US crude stockpiles last week.
At the MCX, Crude oil futures, for the August 2015 contract, closed at Rs 3,083 per barrel, up by 0.13 per cent, after opening at Rs 3,071, against the previous close price of Rs 3,079. It touched an intraday high of Rs 3,113.