OIL PRICE APPROACHES $72 ON EXPECTED US INVENTORY DROP
Oil edged higher towards $72 on Tuesday as a forecast for another drop in United States inventories helped stabilise a volatile market driven by concerns that Europe's debt crisis would cut into energy demand.
US crude stockpiles probably fell by 900,000 barrels last week as imports likely declined, which would be a second straight week of lower supplies, a Reuters poll showed on Monday.
Industry group the American Petroleum Institute will publish inventory figures on Tuesday, while government statistics from the US Energy Information Administration will follow on Wednesday.
Finance ministers from the debt-stricken euro zone on Monday agreed how to deploy a vast anti-contagion programme if needed by struggling members, sending the euro and Asian stock markets higher on Tuesday.
Efforts to contain the crisis came after the Hungarian government sent mixed signals about the health of its economy, rattling financial markets and sending crude below $70 on Monday for the first time in almost two weeks.
Prices of front-month US crude, down 18 per cent from a 19-month high above $87 in early May, on Tuesday gained 43 cents to $71.87. ICE Brent crude rose 27 cents to $72.39.
'The heavy sell-off since Friday seems to be finished,'' said Tetsu Emori, a fund manager at Tokyo-based Astmax Company Limited
'The market has been supported by short covering, and some people are feeling that 70 dollars is quite cheap according to market fundamentals.
'The level of US crude inventory is still quite high, but people are looking at a trend of decreases.'