Investing.com - Oil prices rose to fresh seven-month highs in European trade on Tuesday, adding to sharp overnight gains amid mounting concerns over global supply disruptions.
Oil prices have been well-supported in recent sessions due to a combination of Nigerian, Libyan and Venezuelan supply outages, declining U.S. shale output and reduced production of Canadian crude as a result of fires in Alberta's oil sands region.
Crude oil for June delivery on the New York Mercantile Exchange climbed to a session high of $48.42 a barrel, the most since October 13. It last stood at $48.30 by 07:50GMT, or 3:50AM ET, up 58 cents, or 1.2%.
A day earlier, New York-traded oil futures surged $1.51, or 3.27%, after Goldman Sachs (NYSE:GS) said the market shifted into deficit in May due to falling production.
Nymex oil prices are up nearly 80% since falling to 13-year lows at $26.05 on February 11 as a decline in U.S. shale production boosted sentiment.
The U.S. Energy Information Administration said Monday that shale oil output is expected to drop in June for an eighth consecutive month, falling by nearly 113,000 barrels per day to 4.85 million.
Market players looked ahead to fresh weekly information on U.S. stockpiles of crude and refined products. The American Petroleum Institute will release its inventories report later in the day, while Wednesday’s government report could show crude stockpiles fall by 3.1 million barrels in the week ended May 13.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery rose to a session peak of $49.47 a barrel, a level not seen since November 4, before giving back some gains to trade at $49.37, up 40 cents, or 0.82%.
On Monday, London-traded Brent futures rose $1.14, or 2.38%. Brent futures prices are up by roughly 85% since briefly dropping below $30 a barrel in mid-February, despite the collapse of talks at a Doha summit in April aimed at achieving a production freeze among OPEC and Non-OPEC producers. OPEC meets on June 2 in Vienna and may discuss the freeze initiative again.
Meanwhile, Brent's premium to the WTI crude contract stood at $1.07 a barrel, compared to a gap of $1.25 by close of trade on Monday.