Oil prices extend gains after drop in U.S. stockpiles
Crude oil prices rose on Thursday in early Asian trading, extending gains from the previous session after official data showed U.S. stockpiles had eased from record highs.
Prices surged on Wednesday after a slew of market reports and official data offered some hope that a near three-year global glut in oil is coming to an end, albeit more slowly than many anticipated.
The market was also bouyed after the Federal Reserve raised interest rates in line with expectations but did not signal any pick-up in the pace of further rises.
U.S. West Texas Intermediate (WTI) crude was up 31 cents, or 0.6 percent, at $49.17 a barrel by 0202 GMT, having surged 2.4 percent in the previous session, its first increase in eight days.
Brent futures climbed 35 cents, or 0.7 percent, to $52.16. They had their first increase in seven days on Wednesday, gaining 1.7 percent.
The benchmarks have bounced off their lowest levels since the Organization of the Petroleum Exporting Countries (OPEC) agreed at the end of last year to cut crude production, with an initial price surge evaporating as stockpiles remained high.
Global oil inventories rose for the first time in six months in January, despite the OPEC agreement, the International Energy Agency said in its monthly oil report on Wednesday.
But data from the U.S. Energy Information Administration (EIA) showed U.S. crude stocks fell last week, the first weekly decline after nine straight increases.
Crude inventories fell 237,000 barrels in the week to March 10. Analysts had forecast an increase of 3.7 million barrels.
The inventories have been closely watched by oil traders to determine whether the OPEC agreement to cut output is reducing the global glut.
“Inventories are the barometer of global oil market rebalancing,” Bernstein Energy said in a note on Thursday.
“While the large (global) inventory build seems counter-intuitive given the cuts to OPEC supply, there are good reasons for this,” Bernstein said, citing seasonal declines in demand, time lags between cuts and deliveries and traders tapping floating storage.
Oil bulls were also encouraged after the IEA said demand should overtake supply in the first half of this year.