Crude oil futures pushed higher again in European morning tradingTuesday, with geopolitical risk remaining elevated and the market stilldigesting OPEC's higher forecasts for global demand this year.
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At 1100 GMT, ICE July Brent crude futures were trading at $79.14/b, up91 cents from Monday's settle, while NYMEX June WTI crude futures were 65cents higher at $71.61/b.
OPEC in its latest monthly report on Monday increased its world demandforecasts for 2018, with growth in consumption revised up by 25,000 b/dto 1.65 million b/d from the previous report.
OPEC also said OECD commercial crude oil stockpiles had declined in Marchto 9 million barrels above the five-year average.
The revised demand growth predictions come at a time when the globalcrude market is also facing other significant supply-side question marks, suchas the impact of the imposition of US sanctions on Iranian output and theongoing struggles of the Venezuelan oil sector.
Venezuela's production dropped 40,000 b/d to 1.44 million b/d in April,according to secondary sources.
While there are doubts over Iranian and Venezuelan production, US crudeproduction has continued to rise in recent months. According to analysts, oncecertain logistical issues are solved in the US, its crude production can helpfill the gap left by production declines elsewhere.
"The rapidly growing US shale oil production is currently helping to plugthe supply gap to only a limited extent because pipeline bottlenecks arepreventing some of the oil from reaching the refineries and export terminalson the US Gulf Coast," said Commerzbank analysts in a note.
"Once the pipeline problems have been resolved and supply is availableagain, this will have a dampening effect on prices."
In the short term, there are expectations of a further decline in USstockpiles for the week ended May 11. An S&P Global Platts survey of analystsindicates US crude stocks are expected to fall by 2.3 million barrels.
Official data on US crude and product stocks will be released by theEnergy Information Administration on Wednesday. The American PetroleumInstitute meanwhile will release its weekly inventory numbers later Tuesday.
--John Morley, firstname.lastname@example.org
--Edited by Alisdair Bowles, email@example.com