Oil prices in modest rise after last week's rally

World oil prices modestly extended last week's gains on Apr 13 in cautious trade as investors digested news of another rise in US crude oil inventories in an abundantly supplied global market. (File photo: AFP/Andy Buchanan)

NEW YORK: World oil prices modestly extended last week's gains on Monday (Apr 13) in cautious trade as investors digested news of another rise in US crude oil inventories in an abundantly supplied global market.

US benchmark West Texas Intermediate for delivery in May closed at US$51.91 a barrel, up 27 cents from Friday's closing level. Brent North Sea crude for May, the global benchmark, crept up a slight six cents to settle at US$57.93 in London trade.

The New York market had opened solidly higher, encouraged by poor Chinese trade data that stoked speculation that the Chinese government would step in with more support for its economy.

"The crude complex is seeing continued momentum from last week's rally, as the slumbering notion of 'bad is good' is awakened once more by some dire data out of China, prompting hopes of stimulus measures from the world's largest energy consumer," said Matt Smith of Schneider Electric.

But the market fell off in the morning after energy data provider Genscape reported that US crude oil supplies had again increased at the key storage hub in Cushing, Oklahoma, the delivery point for WTI, said Bill Baruch of iiTrader.com. That suggested that US production continues to swamp the market.

"We're entering a big week with a lot of key releases," Baruch said, ticking off China's economic growth numbers on Tuesday, the Department of Energy's US inventories report Wednesday, and OPEC's monthly market report on Thursday.

Both WTI and Brent gained more than five percent last week after a drop in the number of US oil rigs in operation, better economic data from Germany and fading concerns about a return of Iranian oil to an oversupplied market after Tehran reached a preliminary deal with Western powers over its nuclear programme.