Oil prices rose above $72 aÂ Â barrel on Tuesday, paringÂ gains after earlier jumping more than 2 percent on unprecedented Asian trading volumes. Trades in Brent and then U.S. crude oil futures surged to more than 10 times the norm for the Asian time zone as prices leapt more than $1.50 The jump was led by a sudden spike in Brent buying pinned on fund positioning.
Both prices and volumes cooled in London trade, with U.S. crude for August delivery up $1.08 at $72.57 a barrel, off its earlier eight_month high of $73.38.
Some traders attributed the leap in prices and volumes in Asia to big fund players in the market.
â€œThis could be end of quarter movement, and traders are trying to push prices higher and then selling before closing their books,â€ said Mark Pervan, senior commodities analyst at ANZ Bank.
â€œI havenâ€™t seen any new catalyst on the news front.â€ Oil prices were also supported by a weaker U.S. dollar on Tuesday, which can make commodities denominated in the currency more attractive to investors. Unrest in Africaâ€™s top producer Nigeria has helped to underpin oilâ€™s gains this week as it increases expectations of a tightening of oil supplies from the region.
The countryâ€™s main militant group said on Monday its fighters had attacked an oil facility belonging to Royal Dutch Shell days after President Umaru Yarâ€™Adua proposed an amnesty.
Driven by hopes of a global economic recovery, oil prices are on track to post a near 50 percent increase in the second quarter, the highest quarterly percentage gain since 1990. Oil has rallied on hopes for an improving economic outlook and a growing appetite for risk among investors, a factor given further impetus by Asian and U.S. stock market gains.
Later on Tuesday the focus will turn to crude and oil products inventory numbers from the United States for the latest indication of demand from the worldâ€™s biggest fuel consumer.
A Reuters poll of analysts ahead of weekly data forecast U.S. crude stockpiles fell by 1.6 million barrels last week, while gasoline stocks were seen up 2 million barrels and distillate stocks rose 1.5 million barrels. The American Petroleum Institute will release its weekly U.S. inventory at 2030 GMT, while the U.S. Energy Information Administration report is due out on Wednesday.