By Jenny W. Hsu 
 

Oil futures added to overnight gains in Asia trading Wednesday, as the market got a lift from ongoing supply disruptions in Libya.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May were recently up 6 cents in the Globex electronic session at $47.76 a barrel, while May Brent crude on London's ICE Futures exchange rose 2 cents to $50.58.

Prices ended up more than 1% higher as of the New York close Tuesday after Libya reported the closure of key pipelines as tension between the government and a militia flared up again, choking off some 250,000 barrels a day of oil.

The country's "March output will show a decline, and the intermediate-term plan to increase output is at least somewhat less certain than before," said Tim Evans, a Citi Futures energy analyst.

Bulls were also cheered by the latest rhetoric from members of the Organization of the Petroleum Exporting Countries, who are showing a stronger willingness to cut more of their supplies until global inventories return to a more-manageable level.

Not seemingly impacting prices in Asia was the American Petroleum Institute's weekly reading on U.S. oil inventories. It said late Tuesday that supplies rose 1.9 million barrels in the week ended March 24. A survey by The Wall Street Journal has analysts anticipating the U.S. Energy Information Administration will on Wednesday report a 1-million-barrel increase in its count but declines in refined-product inventories. Such drops would help support crude prices.

Meanwhile, market players are eyeing the reshaping of U.S. energy policy under President Donald Trump, who on Tuesday signed an executive order to roll back environmental protection measures implemented by his predecessor. The move underscores Mr. Trump's resolve to revitalize traditional energy sectors such as oil and coal as part of his campaign promises.

While the move may provide some incentives for major energy companies to drill more, the fate of the proposed policy remains opaque.

Still, "OPEC will definitely take" U.S. policy steps "under consideration when deciding whether to extend" its production-cut deal past May, said Gao Jian, an energy analyst at SCI International. "But no matter what, the cartel must find a way to shrink the inventories," though "OPEC is faced with the tough choice between gaining market share and pushing prices higher."

Nymex reformulated gasoline blendstock for April--the benchmark gasoline contract--edged lower to $1.6318 a gallon while April diesel traded at $1.5222. Meanwhile, ICE gas oil for April was recently down $1.25 from Tuesday's settlement at $58.50 a metric ton.

Write to Jenny W. Hsu at jenny.hsu@wsj.com

(END) Dow Jones Newswires

March 28, 2017 23:06 ET (03:06 GMT)