U.S. West Texas Intermediate (WTI) crude oil futures were trading at $45.76 per barrel at 0659 GMT, up 42 cents, or 0.9 percent, from their previous close.
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Prices rallied overnight after data released by the U.S. Energy Information Administration showed a bigger-than-expected 6.2-million barrels fall in domestic crude stockpiles for the week ended September 16. OPEC members and Russian Federation failed to agree at a meeting in Doha in April to limit production after Iran declined to attend and Saudi Arabia refused to proceed without all of the OPEC states participating.
Crude oil prices extended gains from the previous session in Asian trading on Thursday after a surprise third consecutive weekly U.S. crude inventory drawdown sent prices higher in NY. US oil futures rose $1.09 to $46.43 a barrel.
Libya exported its first oil cargo since at least 2014 from the port of Ras Lanuf.
Natural-gas futures, however, retreated from a 20-month high as cooler US weather forecasts hurt demand expectations.
On Wednesday, OPEC members will meet in Algeria to discuss measures to stabilize prices, but many market watchers remain skeptical of any real action given the longstanding tensions within the group. Venezuela’s evaluation is that global production is at 94 million barrels per day, of which market needs to go down 9 million barrels per day to sustain the level of consumption.
“In a way, this strength is justified”, PVM Oil Associates strategist Tamas Varga said.
“It’s only logical that a few days before that meeting, shorts will start covering and yesterday’s United States stock figures provided the ideal excuse”, PVM Oil Associates strategist Tamas Varga said.
Overnight, oil prices extended sharp overnight gains during North American hours on Thursday, as a broadly weaker USA dollar and easing concerns over a slowdown in demand boosted sentiment.
The gains were given extra momentum by the weaker dollar, which makes oil cheaper for people holding other currencies. Instead, most believe that oil producers will continue to monitor the market and possibly postpone freeze talks to the official OPEC meeting in Vienna on November 30.
Analysts are not attaching a high chance to a deal materialising and, even if it did, whether it would help clear the global overhang of crude supplies.
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“Without a major catalyst, prices will remain in a narrow range”, said Gao Jian, an energy analyst at SCI International, adding that the latest price drop was a result of technical selling.
