LONDON: World oil prices rose further Tuesday on forecasts that US shale oil production will decline and hopes the Chinese government will roll out a stimulus package for the slowing economy.
US benchmark West Texas Intermediate for delivery in May won 44 cents to $52.35 a barrel.
Brent North Sea crude for May gained 32 cents to $58.25 per barrel at about midday in London.
A drop in American production is expected to help ease the supply glut that has sent oil prices collapsing since June last year, while a stimulus package could boost demand in China, the world’s biggest energy user, analysts said.
The US government’s Energy Information Administration said Monday shale oil output could decline in May, which Bloomberg News said was the first time the agency had projected a drop since it began issuing a monthly drilling productivity report in 2013.
David Lennox, Resource analyst for Fat Prophets in Sydney, said the projection was “positive for the market as it could signal the start of a decline for US shale crude oil production.”