BUSINESS NEWS - Oil prices continued their climb on Tuesday, hitting eight-month highs, as expectations of United States (US) crude draws underpinned a market already worried about potential supply shortages from attacks on Nigeria’s oil industry.

US crude stockpiles likely fell by 3.5 million barrels last week to mark a third straight week of declines, a preliminary Reuters poll showed.

Trade group American Petroleum Institute is expected to cite a drawdown as well in its inventory report due at 4:30pm, before official stockpiles data slated for Wednesday from the US government.

Crude oil rallied in the past two sessions after rebels in Nigeria’s Niger Delta vowed to halt output in the country, which until last year was Africa’s biggest producer turning out about 2 million barrels per day (bpd). The Nigerian government said on Tuesday it was initiating talks with the rebels.

“The market remains concerned about unscheduled supply interruptions with the latest coming from additional shut-ins in Nigeria,” Dominick Chirichella, senior partner at the Energy Management Institute in New York, said.

“With the industry projecting a decline in total US crude oil stocks in this week’s reports, the market bears are remaining on the sidelines.”

Brent crude futures LCOc1 were up 55 cents at $51.10 (£35.1) a barrel by 12:20 pm EDT (1620 GMT), after rising to $51.30 earlier, their highest since October.