Crude Oil Ends Sharply Higher, Pushing $61 A Barrel

(RTTNews) - U.S. crude oil moved up sharply to end at a near one-week high Tuesday, as the dollar trended lower against some major currencies while the U.S. Energy Information Administration raised its price forecast for the year. Meanwhile, investors anticipate the official weekly oil inventory report to show a decline in U.S. supplies.

Earlier today, the U.S. Energy Information Administration lifted its 2015 outlook for West Texas Intermediate and Brent crude prices in its monthly report. The EIA now sees WTI prices to average $54.32 a barrel in 2015, up from its earlier forecast of $52.52. The EIA now projects Brent crude at $60.79 this year, an upward revision from its prior forecast of $59.39.

The WTI crude to expected to average $65.57 a barrel in 2016, down from its earlier forecast of $70.07.

Industry group American Petroleum Institute is expected release its weekly inventories data later today, while the official weekly data from the Energy Information Administration is scheduled for Wednesday.

Global supplies continue to rise and OPEC on Monday predicted that oil will not rise above $100 in the next decade. For now, however, tensions in the Middle East and a weakening U.S. dollar are keeping crude oil futures afloat.

In the past few months, crude oil has moved well away from 6-year lows near $44 set earlier in 2015.

The dollar slipped near its lowest in two months versus the euro, following weakness in the U.S. Treasury market, as 10-year yields jumped to its highest closing level in over five months.

Light Sweet Crude Oil futures for June delivery, the most actively traded contract, jumped $1.50 or 2.5 percent, to settle at $60.75 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for June delivery scaled a high of $61.15 a barrel intraday and a low of $59.12.

On Monday, crude oil dropped $0.14 or 0.2 percent, to settle at $59.25 a barrel as the dollar trended higher against some major currencies, with investors awaiting the weekly crude stockpiles report from the U.S. Energy Information Administration.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.54 on Tuesday, down from its previous close of 95.02 on Monday in late North American trade. The dollar scaled a high of 95.16 intraday and a low of 94.24.

The euro trended higher against the dollar at $1.1218 on Tuesday, as compared to its previous close of $1.1155 in North American trade late Monday. The euro scaled a high of $1.1279 intraday and a low of $1.1135.

On the economic front, U.K. industrial production unexpectedly grew in March for a second straight month, led by a robust gain in oil and gas extraction and stronger manufacturing output, giving some respite from concerns of a slowdown in the economic growth momentum.

Industrial production rose 0.5 percent from February, when it edged up 0.1 percent, data from the Office for National Statistics revealed Tuesday. Economists had forecast stagnation for the month. The latest growth rate was the strongest since September last year, when production grew 0.6 percent.

The leading index for Japan, which measures the future economic activity, increased as expected in March, preliminary figures from the Cabinet Office showed Tuesday. The index rose to 105.5 in March from 104.7 in the previous month, in line with economists' expectations. The reading was also at its highest since September last year, when it was 105.8.

The Organization for Economic Co-operation and Development's leading index signaled a stable growth momentum in the region and a positive change in growth momentum in the euro area.

The OECD's composite leading indicator, designed to anticipate economic turning points in economic activity, came in at 100.1 in April, down slightly from 100.2 in February. Stable growth momentum was also observed in Japan, Germany, India and the United Kingdom.

In the euro area, signs of positive growth momentum in seen especially in France and Italy, the OECD said. The index suggested easing growth momentum for the United States and China, while in Russia the index continues to point to a loss in growth momentum.