LONDON (Reuters) – Oil neared $68 on Monday, again driven by the U.S. gasoline market where stocks are at a seasonal six-year low ahead of peak summer demand.
London Brent, currently seen as more representative of global prices than U.S. oil, has held in a $6 range since late March, supported by motor fuel demand in top consumer the United States and capped by stubborn resistance below $70.
At 1058 GMT Brent was up 30 cents at $67.95 a barrel after dropping 76 cents on Monday. Much of Europe is closed for May Day. U.S. crude was up 9 cents at $65.80.
Oil rallied sharply on Friday after top exporter Saudi Arabia said it had arrested Islamic militants, including trainee pilots preparing for suicide operations against oil facilities.
Security of oil supplies will be a topic at a meeting of Asian oil exporters and consumers in Riyadh this week, the Saudi oil minister said in remarks broadcast on Monday.
“The most important thing for consumers and producers is the security of energy,” Ali al-Naimi said.
Crude oil is drawing support from U.S. gasoline — New York gasoline futures hit an 11-month high on Monday after refinery shutdowns. On Tuesday, the contract was up 0.23 percent at $2.2645 a gallon.
U.S. gasoline stocks are expected to have fallen last week for the 12th week in a row, a preliminary Reuters poll of analysts showed.
Man Financial Energy analyst Edward Meir said crude prices may turn downwards if the U.S. Energy Information Administration (EIA) data, due for release on Wednesday, shows a smaller than expected fall in gasoline stocks.
“However, judging by early indications, bears should not expect much relief…It seems, therefore, that generally overbought technical conditions will bump against yet another set of constructive EIA numbers,” he said.
Stocks of motor fuel, already down almost 15 percent since the start of February, are seen dropping another 700,000 barrels. Crude stocks were seen rising 1.4 million barrels.