LONDON – Oil climbed toward $60 a barrel on Wednesday as investors expected gasoline inventories to drop further in top consumer, the United States, before the summer driving season.
The latest weekly report on U.S. fuel inventories from the Energy Information Administration due out later on Wednesday is expected to show gasoline stocks fell by 1.7 million barrels — the sixth drop in a row.
"Gasoline is still pretty much the driver of the market today, as it has been for the last few days," said Olivier Jakob of oil consultancy Petromatrix.
U.S. crude was trading up 45 cents at $59.70 a barrel by 1241 GMT. London's Brent was up 55 cents at $60.75.
Oil remains under pressure from concern about the health of the economies of the world's two top oil consumers, the United States and China, and fell to a six-week low at the end of last week.
Even so, gasoline is supporting the oil market as traders increasingly focus on supplies of the motor fuel in the United States in the spring and summer, when demand peaks.
Gasoline futures, which hit a seven-month high of $1.985 a gallon on Tuesday, show no sign yet of reversing course, analysts said. The contract was up 0.9 percent at $1.9600.
Besides the drop in gasoline stocks, the EIA report is expected to show a 1.3 million barrel fall in distillates, which include diesel and heating oil.
Stocks of crude are expected to rise by 800,000 barrels as rising imports offset a pick-up in refinery processing rates.
U.S. crude has risen from a 20-month low of $49.90 hit in January, partly because of supply cuts by OPEC, though it is well below an all-time high of $78.40 reached last July.
The Organization of the Petroleum Exporting Countries, source of more than a third of world output, agreed last week to keep current oil supply restraints in place.
OPEC oil ministers have not rule out further action on supply before September, when they are next scheduled to hold a meeting to decide their production policy.