US light crude oil futures for August delivery were up 1.63% at $99.62 per barrel by mid-afternoon in New York, after having traded as high as $99.87 earlier. This is the sixth time out of the last seven trading days oil prices have advanced.
News that US factory orders increased 2.1% in May, while April’s data was upwardly revised from 1.0% to 1.3%, backs up yesterday’s reports that indicated expansion in the manufacturing sector. Such growth would imply a robust demand outlook for oil.
Weekly petroleum inventory data from the US Energy Department will be released tomorrow. A Thomson-Reuters survey of analysts shows the consensus of expectation is for a large drop in crude oil stocks, with a decrease of 2.68 million barrels expected.
Such a large drawdown would point towards increasing demand, as refineries crank up their rate of output of crude distillates in time for the US Independence Day holiday. US domestic crude supplies have been very high by historical standards of late, with crude production surging on account of the shale boom.
The peak petroleum-consumption period between May and September, when many Americans take to the roads for their annual holidays, is helping to contend with this increasing supply. Strong demand in the US, which is the largest oil-consuming country in the world, is naturally supportive of the oil price.