Oil prices edged higher on Wednesday ahead of the release of U.S. petroleum data that was expected to show a ninth straight weekly drawdown in crude inventories.
Brent futures rose 12 cents to $69.27 a barrel as of 12:31 p.m. EST (1731 GMT), while U.S. West Texas Intermediate (WTI) crude gained 19 cents to $63.93 per barrel.
Both contracts climbed to their highest levels since December 2014 this week with Brent reaching $70.37 on Monday and WTI up to $64.89 on Tuesday.
“Movements in oil prices have been muted in today’s session as market participants look ahead to the upcoming oil inventory report from the United States," said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
U.S. crude inventories were estimated to have fallen 3.6 million barrels in the week ended Jan. 12, according to a preliminary Reuters poll.
The American Petroleum Institute (API) report will be released at 4:30 p.m. EST (2130 GMT), followed by U.S. Energy Information Administration (EIA) data on Thursday at 11 a.m. EST. Both were delayed by a day due to the U.S. Martin Luther King Jr. Day holiday.
Tighter markets have lifted both crude benchmarks about 13 percent above levels in early December, helped by production curbs by OPEC and Russia, as well as by healthy demand growth. Several analysts this week have raised their expectation for 2018 prices on the back of the rally.
The Organization of the Petroleum Exporting Countries and Russia have been curbing production since January 2017; the cuts are set to last through 2018.
The curbs have coincided with strong demand and solid economic growth, tightening the market.
Elsewhere, threats by Nigerian militants on Wednesday to attack offshore oil facilities within days, was supportive of prices.
Markets may come under pressure from rising U.S. production, analysts say.
On Tuesday, the EIA said it expected U.S. oil output to increase in February, with production from shale rising by 111,000 barrels per day (bpd) to 6.55 million bpd.
U.S. crude output is expected to soon break 10 million bpd, challenging top producers Russia and Saudi Arabia.
Norbert Ruecker, head of commodity research at Swiss bank Julius Baer, also said that "hedge fund expectations for further rising prices have reached excessive levels," threatening prices.
Money managers have raised bullish positions in WTI and Brent crude futures and options to a record, according to the U.S. Commodity Futures Trading Commission and the Intercontinental Exchange.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)