NEW YORK (Reuters) - Oil prices edged higher in choppy trade on Thursday, supported by a pickup in equity markets but pressured by expectations that crude supply will exceed demand later this year.
West Texas Intermediate (WTI) crude CLc1 futures rose 36 cents to $61.32 a barrel, a 0.6 percent gain, by 11:11 a.m. EST (1511 GMT). Brent crude LCOc1 futures for May delivery gained 30 cents to $65.19 a barrel.
Oil rose in tandem with a pickup in U.S. stock markets .SPX. Crude futures have moved in sync with equities uninterruptedly for the past 99 trading days, the longest such stretch in two years. The S&P 500 stock index rose 0.3 percent.
Prices bounced around after the United States announced new sanctions against Russian individuals and groups, including Moscow’s intelligence services and a Russian propaganda organization.
“The rising tensions between the West and Russia raise the potential for reduced trade flows and economic activity, which would diminish energy demand growth,” said John Kilduff, partner at investment manager Again Capital in New York.
Rising global oil demand, along with supply constraints from the Organization of the Petroleum Exporting Countries, has helped keep oil above $60 a barrel.
The International Energy Agency said global crude demand would pick up this year, but also noted rising supply.
OPEC on Wednesday raised its forecast for non-member oil supply this year to almost double the growth predicted four months ago. [OPEC/M]
“Participants have noticed prospects for improving global oil demand as highlighted by the latest IEA report as well as a persistently weak U.S. dollar index, which could further support consumption of the fuel,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
The dollar index, which measures the greenback against a slate of currencies, is down about 2.4 percent for the year. A weaker dollar makes oil cheaper for holders of other currencies.
However, the relentless climb in U.S. crude output C-OUT-T-EIA has loomed over markets, as production hit another record last week at 10.38 million bpd.
OPEC and other producers led by Russia began cutting supply in January 2017 to erase a global crude glut that had built up since 2014. This has been somewhat offset by surging U.S. crude production.
The IEA believes non-OPEC supply, led by the United States, will grow by 1.8 million bpd this year, while demand will grow by about 1.5 million bpd.
Additional reporting by Amanda Cooper in London and Henning Gloystein in Singapore