Investing.com – Crude settled higher on Tuesday, after a severe disruption to Libyan oil supplies supported a rebound in oil prices while comments from officials suggesting OPEC could extend its current deal beyond June lifted sentiment.
On the New York Mercantile Exchange crude futures for May delivery gained 64 cents to settle at $48.37 a barrel, while on London's Intercontinental Exchange, Brent added 55 cents to trade at $51.44 a barrel.
Armed factions at the western Libyan oil fields of Sharara and Wafa blocked production, reducing output by 252,000 barrels per day (bpd), about a third of production, a source at the National Oil Corporation (NOC) said on Tuesday.
Elsewhere, Iranian Oil Minister Bijan Zanganeh, said a global deal aimed at reducing the glut in supply is likely to be extended beyond June but that time is needed to discuss the subject.
The drop in Libyan production, pushed crude prices to a session high of $48.74 a barrel, but prices pilled back later during the session, as investors shifted focus to the elevated levels of U.S. crude inventories.
A fresh batch of inventories data from the American Petroleum Institute at 16:30 EDT, and the U.S. Energy Information Administration at 10:30 EDT on Wednesday is expected to show U.S. crude stockpiles rose 1.2 million barrels to an all-time new high.
The build-up in U.S. crude inventories has sparked fears that OPEC may struggle to tackle the oversupply issue in the industry.
In November last year, OPEC and other producers, including Russia agreed to cut output by about 1.8 million barrels per day (bpd) in an effort to combat the oversupply issue that has pressured prices over the last two years.