Crude-oil futures were higher in Asian trade Monday, as investors expect a decline in U.S. crude inventories after a heavy storm last week in the nation's major oil producing region.
Some technical rebound and bargain-hunting also pushed prices higher, after prices slipped into a bear market last week, though oversupply concerns continue to cloud the market outlook.
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Tropical Storm Cindy last week shuttered several oil rigs and platforms in the Gulf of Mexico, an area responsible for over 17% of the country's oil production. Media reports say that at least a sixth of the production there was temporarily suspended.
"This will definitely have an effect to this week's U.S. inventory data as cargoes fail to make port," said Stuart Ive, a client manager at OM Financial.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $43.47 a barrel at 0234 GMT, up $0.46 or 1.1% in the Globex electronic session. August Brent crude on London's ICE Futures exchange rose $0.48 or 1.1% to $46.02 a barrel.
However, longstanding bearish factors, including strong production out of Libya, Nigeria, and U.S., still loom over the global market. Last week, shale producers added 11 more rigs, marking the 23rd weekly rise and the longest streak in a data series that stretch back decades.
In the near term, any rise in prices will be "more gradual and fragile" than previously anticipated, said Grace Liu, head of research at Hong Kong-based brokerage Guotai Junan International.
The production cuts by the Organization of the Petroleum Exporting Countries and Russia are taking much longer to take effect, so the market "just needs to give it more time," she said, noting that U.S. production at around an average of 9.3 million barrels a day may be close to the peak.
Some investors are betting demand in emerging countries, such as China, to absorb some surplus oil as it seeks to fill up its strategic petroleum reserve.
In May, China was again the world's leading crude buyer, overtaking the U.S. for the fourth straight month, with 8.8 million barrels of oil imported a day, the second highest month on record for China.
Meanwhile, the volatile relations between Qatar and a number of Arab states will also be worth-watching, for signs of escalating tension in the Middle East, traders say.
Nymex reformulated gasoline blendstock was flat at $1.435 a gallon, while July diesel gained 0.1% at $1.374. July ICE gasoil slid 0.9% to $408.75 a metric ton.
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(END) Dow Jones Newswires
June 25, 2017 23:30 ET (03:30 GMT)