1st LD Writethru: Oil prices rise on supply forecast

Oil prices gained Tuesday as market expected another drop in U.S. crude inventories.

U.S. Energy Information Administration (EIA) Wednesday will publish its report on crude data of last week. Traders expected to see U.S. crude inventories to fall for another week.

For the week ended May 29, U.S. crude supplies decreased 1.9 million barrels to 477.4 million, 87.9 million barrels more than a year earlier. Inventories at Cushing, Oklahoma, the delivery point for the U.S. contract lost 980,000 barrels to 59.03 million barrels. U.S. crude production added 20,000 barrels to 9.586 million barrels a day (b/d) that week.

Total U.S. crude oil production averaged an estimated 9.6 million b/d in May, said EIA in its monthly short-term energy outlook report. It projected U.S. crude oil production averages 9. 4 million b/d in 2015 and 9.3 million b/d in 2016.

EIA forecasts Brent crude oil prices will average 61 U.S. dollars in 2015 and 67 dollars in 2016, and U.S. crude prices in both 2015 and 2016 are expected to average 5 dollars less than the Brent price.

Light, sweet crude for July delivery moved up 2 dollars to settle at 60.14 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery increased 2.19 dollars to close at 64.88 dollars a barrel. Endite