The price of oil rose above $97 a barrel Wednesday on expectations of a sharp fall in U.S. crude stockpiles.
By early afternoon in Europe, benchmark crude for January delivery was up $1.06 to $97.10 a barrel in electronic trading on the New York Mercantile Exchange.
The contract rose $2.22 on Tuesday after TransCanada said the southern leg of its Keystone XL pipeline should be operational early next month. The pipeline would move oil out of Cushing, Oklahoma, the physical delivery point for futures on U.S. benchmark oil, to Port Arthur, Texas. That should lead to greater demand for the oil, which costs less than the crudes imported into the Gulf region.
Meanwhile, U.S. crude supplies are expected to have fallen last weeks after 10 consecutive weeks of gains, which might point to stronger demand.
Analysts polled by Platts, the energy information arm of McGraw-Hill Cos., expected crude oil stocks to show a decline of 1.25 million barrels while gasoline stocks were seen increasing 2 million barrels.