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 Brent futures were up $1.23 at $64.93 a barrel by 8.05 a.m. EDT,
having touched a high of $65.47. Front month U.S. crude futures were
up $1.04 at $61.01 per barrel.
Data from the U.S. Energy Information Administration, due at 10.30
a.m. EDT, is forecast to show that U.S. crude stocks fell for a
seventh consecutive week, according to a Reuters poll of analysts.
JP Morgan said in its weekly oil research note that U.S. production
had reached a new high this week but would start to drop.
An expected fall in U.S. crude production because of the relatively
high cost of producing shale has also supported prices.
Despite the demand strength in the United States and Asia, prices
have mostly stayed below $65 a barrel this year, compared with Brent
crude's $115 this time last year.
An excess supply of oil in the Atlantic basin has seen traders leave
full tankers at sea.
"There are so many tankers floating for prompt delivery that people
will want to see the fall in shale production, rather than
predictions of a decline, before it will give much support," said
Maarten van Mourik, an independent oil economist in Paris.
Yet some analysts expect prices to rise somewhat going into the
second half of the year because of strong demand and an expected
fall in stocks.
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"Fundamentals are at an inflection point and will improve from here,
with high refinery runs this summer and sequentially declining U.S.
crude production. As crude stocks erode, prices will gradually
strengthen," United States-based Pira Energy said.
Strong U.S. fuel demand, this week's tropical storm, Canadian
wildfires that led to the closure of oil production and continuing
stock withdrawals have resulted in U.S. prices outperforming Brent
contracts, pulling down Brent's premium to around $3 a barrel.
(Additional reporting by Henning Gloystein in Singapore, Editing by
William Hardy and David Goodman)
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