Oil rose to a fresh six month high above $60 a barrel on Tuesday as unrest in key producer Nigeria and a U.S. refinery outage kindled concerns over oil fundamentals after weeks of equity-led rallies.
U.S. crude for June struck $60.48 a barrel, the highest level since mid-November, and it was trading $1.02 up at $60.05 by 0843 GMT (4:43 a.m. EDT) ahead of its expiry later in the day. The more actively traded July contract hit as high as $60.99.
On Monday, U.S. crude rose more than $1 to $60.21, the highest settlement price since November.
North Sea Brent for July also struck its six month high of $59.65 and it was trading 98 cents up at $59.45.
Oil prices have been in an up-trend since mid-April. They also have recovered from below $33 in December last year after a plunge from record highs above $147 in July.
It is a combination of factors of what we have had and concerns over supply, which is adding risk premium to the market, Oliver Jakob with Petromatrix said.
In the past few weeks, oil traded in a strong correlation with the equity market without looking much at fundamentals. Yesterday, support also came from supply disruption after Sunoco's refinery fire, which affected gasoline output, and concerns over Nigeria.
Key African and OPEC producer Nigeria has long suffered from losing part of its oil output and missing export obligations due to insecurity in the oil-rich Niger Delta.
Main militant group said on Monday it would blockade key waterways in the delta to try to prevent crude oil exports after days of military helicopter and gunboat raids on its camps.
In the world' top consumer United States, an explosion disrupted output at Sunoco's refinery in Pennsylvania, pushing U.S. RBOB gasoline to a seven-month high ahead of the peak summer driving season.
Stocks in Europe were extending gains on Tuesday. Asian shares hit their seven month high. <.EU>
Traders will shift their focus to two sets of U.S. weekly oil data later on Tuesday and Wednesday. Analysts expect the data to show falls in crude oil and gasoline inventories by 700,000 barrels and 1.0 million barrels, respectively.
Ahead of the Atlantic hurricane season this year, forecasters said a strong rain storm off the east coast of Florida had the potential to develop into the first named storm. In the past, strong storms and hurricanes have disrupted oil facilities in the U.S. Gulf area, pushing up oil prices.
(Reporting by Chua Baizhen in Singapore and Ikuko Kao in London; Editing by Keiron Henderson)