Investing.com - Oil prices edged higher on Tuesday, as investors looked ahead to fresh data on U.S. commercial crude inventories to gauge the strength of demand in the world’s largest oil consumer and how fast output levels will continue to rise.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2030GMT). Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 1.9 million barrels.
New York-traded West Texas Intermediate crude futures tacked on 45 cents, or roughly 0.6%, to $66.64 a barrel by 3:10AM ET (0710GMT). The U.S. benchmark lost $1.17, or around 1.7%, in the last session.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., inched up 42 cents, or about 0.6%, to $71.86 a barrel, after losing $1.16, or 1.6%, a day earlier.
Oil ended lower on Monday, giving back some of last week’s sharp gains, as concerns over tensions in the Middle East waned with investors taking the view that Western-led strikes on Syria were a one-off intervention.
While Syria is not a significant oil producer itself, the wider Middle East is the world's most important crude exporter and tension in the region tends to put oil markets on edge.
A rise in U.S. drilling for new production also dragged on prices.
The U.S. rig count, an early indicator of future output, is at its highest level since March 2015, underscoring worries about rising U.S. output.
U.S. oil production, driven by shale extraction, rose to an all-time high of 10.52 million barrels per day (bpd) last week, staying above Saudi Arabia's output levels and within reach of Russia, the world's biggest crude producer.
Analysts and traders have recently warned that booming U.S. shale oil production could potentially derail OPEC's effort to end a supply glut.
OPEC and other producers, including Russia, agreed to cut output by about 1.8 million barrels per day (bpd) in November last year to slash global inventories to the five year-average. The arrangement is set to expire at the end of 2018.
In other energy trading, gasoline futures eased up 0.2% to $2.048 a gallon, while heating oil added 0.4% to $2.078 a gallon.
Natural gas futures slumped 0.7% to $2.732 per million British thermal units.