NEW YORK (AFP) – Oil prices moved higher Tuesday, with the market anticipating the US government's weekly oil report will show a decline in the crude stockpile as the recession-mired economy shows signs of recovery.
New York's main futures contract, light sweet crude for delivery in August, rose 74 cents to close at 64.72 dollars a barrel. The August contract expired at the close.
In London, Brent North Sea crude for September delivery gained 43 cents to settle at 66.87 dollars a barrel.
Prices climbed in "anticipation of the Department of Energy (DoE) stats coming out tomorrow," said Andy Lipow, of Lipow Oil Associates.
The DoE report shows the weekly change in crude and oil products inventories in the United States, the world's biggest energy consumer.
Mike Fitzpatrick at MF Global said the DoE's latest stockpile report "is expected to show that crude stocks have dropped and refined product stores have risen."
Oil products inventories have increased sharply in recent weeks, but Lipow forecast that refinery problems would curb the build in the latest report.
The figures will be "more bullish than the market had anticipated due to a number of refinery problems around the country, in the Gulf Coast and the West Coast," Lipow said.
The oil market also was supported once again by gains in European stock markets. The boost, however, faltered after Wall Street stocks lost momentum.
Over the past five sessions, the benchmark New York futures contract has surged more than five dollars on the back of stock rallies.
Traders also digested key testimony Tuesday from US Federal Reserve chairman Ben Bernanke.
The US Federal Reserve is likely to maintain its easy money policy for some time despite signs of improvement in the economy and financial markets, Bernanke told lawmakers.
Bernanke, delivering his semiannual economic report to Congress, cited "notable improvements" in financial markets and a somewhat brighter economic outlook but considerable risks led by high unemployment.
"In light of the substantial economic slack and limited inflation pressures, monetary policy remains focused on fostering economic recovery," Bernanke told the House of Representatives Financial Services Committee.
The market kept an eye on Iran, where disputed election results have threatened the stability of the oil-producing nation.
The Islamic republic produces about 3.8 million barrels of crude per day and is the third-biggest global oil exporter after Russia and OPEC kingpin Saudi Arabia.
Iranian hardliners on Tuesday denounced a call by reformists for a referendum to resolve the deepening political crisis in the Islamic republic, branding it a Western plot to cause more "havoc."