Crude Up About 2% As US Oil Products Jump; Eyes On Iran
NEW YORK, June 23 (Reuters) - Crude futures rallied around 2 percent on Tuesday, latching onto a rebound in oil products ahead of U.S. inventory data expected to show strong demand for gasoline.
Also supporting prices were signs of trouble with an impending Iranian nuclear deal that could delay Tehran's hopes of lifting Western sanctions on its oil exports.
A strong dollar, which usually pressures commodity prices, did little to temper the rally.
Brent crude futures settled up $1.11, or 1.8 percent, at $64.45 a barrel.
U.S. crude futures settled at $61.01, up 63 cents, or 1 percent.
Oil products gained even more, leading the charge.
Gasoline futures settled up 2.3 percent, holding above the 50-day moving average they briefly fell below on Monday for the first time since February.
Ultra-low sulfur diesel (ULSD) also rose more than 2 percent despite indications that stockpiles of distillates, including diesel, rose last week.
Since the start of the peak U.S. driving season at the end of May, oil products have been extraordinarily strong, which typically translates to higher demand for fuels.
U.S. gasoline inventories were seen to have fallen 400,000 barrels last week, a Reuters poll showed ahead of official data due on Wednesday. Industry group American Petroleum Institute will release its own estimates at 4:30 p.m. EDT (2030 GMT).
Tuesday's rally in oil products bumped up the "crack," or profit margin, refiners derive from processing crude into gasoline <CL-RB1=R> and diesel <CL-HO1=R>, after a recent slump in such margins.
"I'm guessing people who were short the ULSD and gasoline cracks the past few days took some profit to push those markets higher," said David Thompson, executive vice president of energy commodities brokerage Powerhouse in Washington. "Technical and buy-stop orders were probably activated in the process."
The Reuters poll also suggested that U.S. crude oil stocks had fallen for the eighth straight week.
Research house Energy Aspects said it expected more draws at the Cushing, Oklahoma, delivery point for U.S. crude after output declines at U.S. shale basins such as Bakken and the Niobrara and reduced flows from Canadian-originated pipelines.
"Fundamentals north of Cushing remain strong," it said.
In Iran, the parliament passed a bill banning access for U.N. inspectors to its military sites and scientists.
A crude broker in New York said the bill was "an indication that Iran may be running into some difficulties" in meeting a June 30 nuclear pact with world powers to resume crude exports.
(Additional reporting by Simon Falush in London and Keith Wallis in Singapore; Editing by Marguerita Choy and Lisa Von Ahn)
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