Crude Oil Hits $57 Per Barrel on Tuesday as Global Supplies Wane

Oil prices extended gains on Tuesday to $57 per barrel as supplies continue to drop with falling U.S. crude inventories and rising fuel demand in the U.S. Northeast.

Brent crude oil, the global benchmark for Nigerian oil, rose by 3 percent to $57.16 per barrel on Tuesday morning at 9:27 am Nigerian time. While the U.S crude also gained 2.59 percent to $53.55 per barrel.

Data from the U.S government showed a 2.3 million barrels drawdown in stocks at the Cushing, Oklahoma, delivery center for crude futures last week. Another 2.3 million-barrel weekly decline is expected since then.

Also, the 1 million barrels production cut by Saudi Arabia helped reduce global supplies and strengthen the crude oil outlook.

All these coupled with U.S Northeast winter snowstorm that is disrupting crude oil production and expected to affect Pennsylvania, New England, New York City and other major urban centers in the region boosted oil prices.

“Crude is being supported by many small factors this week – expected drawdowns in Cushing, a sudden rise in winter fuel demand amid colder weather, and further talks on Capitol Hill about stimulus checks,” said John Kilduff, partner at Again Capital LLC in New York.