WTI oil races above $60 a barrel ahead of U.S. API supply report

Investing.com - West Texas Intermediate oil futures rallied above the $60-level for the first time since December on Tuesday, as traders looked ahead to weekly data on U.S. stockpiles of crude and refined products later in the day.

On the New York Mercantile Exchange, crude oil for June delivery touched an intraday peak of $60.47 a barrel, the most since December 11, before trading at $60.34 during U.S. morning hours, up $1.41, or 2.39%.

The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles rose by 1.6 million barrels in the week ended May 1.

Total U.S. crude oil inventories rose by 1.9 million barrels last week to 490.9 million barrels, the most in at least 80 years, even as drilling activity fell.

According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 24 last week to 679, the 21st straight week of declines and the lowest level since September 2010.

Market players have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.

U.S. oil futures have been well-supported in recent weeks amid mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months amid an ongoing collapse in rigs drilling for oil.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery tacked on $1.22, or 1.83%, to trade at $67.67 a barrel after hitting a daily high of $67.81, the strongest level since December 8.

The spread between the Brent and the WTI crude contracts stood at $7.33 a barrel, compared to $7.52 by close of trade on Monday.

Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.1% to trade at 95.48 early Tuesday after rising to an overnight peak of 96.10.

The dollar turned lower after official data showed that the U.S. trade deficit widened 43% to $51.37 billion in March, the highest level since 1996, as exports edged up 0.9% and imports surged 7.7%.