Oil prices rose above $60 a barrel on Wednesday, hitting a new six-month high, as investors awaited more U.S. oil inventory data and kept a close watch on equities for direction.
Oil prices gained this week as fire struck gasoline making units at U.S. refineries, lifting U.S. gasoline futures to a seven-month high settlement on Tuesday on supply concerns leading into the peak summer driving season.
U.S. crude rose 45 cents to $60.55 a barrel by 0530 GMT (1:30 a.m. EDT), and London Brent rose 27 cents to $59.19.
Prices have already broken through the $60 level. For today, it's just a small movement within range as there is no significant news in the market, Ryuichi Sato, an analyst at Tokyo-based Mizuho Corporate Bank, said.
He said he would look to the 200-day moving average -- currently at $63.30 -- as the next resistance level for U.S. crude over the next two weeks.
Commodities markets have closely tracked the stock market in recent months as dealers seek signs of economic health.
Tokyo's Nikkei average <.N225> was up 0.49 percent at 0525 GMT (1:25 a.m. EDT), shrugging off data that showed Japan suffered a record contraction in the first quarter.
But oil data from the world's No. 2 economy was more bullish, showing gasoline inventories fell to their lowest since September 2007 and kerosene stocks declined to a near three-year low in part due to strong sales.
Oil prices have been on an upward trend since mid-April on equity-led rallies. They have recovered from below $33 in December after a plunge from record highs above $147 in July.
The move from $50 to $60 is quite abrupt. I don't think oil prices can go much higher at this point ... I think a lot of oil's rise has been driven by speculation that the worst is over, but is the real demand there yet? said Michelle Kwek, an analyst at Informa Global Markets in Singapore.
Traders will also look out for inventory data from the U.S. Energy Information Administration (EIA) due later in the day as the country heads into the vacation season.
U.S. crude stockpiles probably fell last week by 200,000 barrels, while gasoline inventories were down by 1.2 million barrels and distillate stocks up 1.0 million barrels, an expanded Reuters poll showed.
The American Petroleum Institute (API) said on Tuesday U.S. crude stocks fell by a much larger than expected 4.5 million barrels in the week to May 15.
The Organization of Petroleum Exporting Countries (OPEC), which has agreed to cut 4.2 million barrels per day of output since September in a bid to prop up oil prices, has no reason to cut crude production when it next meets on May 28, Algerian Energy and Mines Minister Chakib Khelil said.
If the price stays at this level ... I don't think there will be any reason to cut, he said.
Oil prices have also been buoyed this week by unrest in OPEC member Nigeria. The country's security forces clashed with militants on Tuesday close to an oil flow station in the western Niger Delta operated by Chevron
Africa's top oil and gas exporter, which has sent three battalions of ground troops to search for militants on Tuesday, is on alert for retaliatory attacks after launching its biggest offensive for several years last week against the militants.
(Reporting by Chua Baizhen, Editing by Ben Tan)