U.S. West Texas Intermediate (WTI) crude CLc1 rose $1.10, or 2.7 percent, to settle at $41.93 per barrel. Inventories of the motor fuel slid by 3.26 million barrels last week, according to data from the Energy Information Administration.
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Analysts believe that investors who buy oil when prices are down also contributed to the price hike. As oil is traded in dollars, a weaker US currency makes fuel purchases for countries with other currencies cheaper, potentially spurring demand.
The Cushing draw aside, total USA crude stocks rose for a second straight week, gaining 1.4 million barrels last week, contrary to analysts’ forecasts for an identical draw.
On Thursday, Oil prices inched lower in European trade, after increasing over 3 percent overnight after a larger than expected gasoline draw reduce worries about global oversupply.
The EIA said the 521.1 million barrels in the US stockpile is more than 61 million barrels higher than it was a year ago and more than 150 million barrels above the supply figure two years ago.
USA crude output decreased by 55,000 barrels a day to 8.46 million a day, the EIA reported Wednesday. “We don’t expect a straight shot to $70”, said one oil industry executive on Tuesday.
“In the past 72 hours, there have been reports of successful negotiations to re-open blockaded oil terminals in Eastern Libya and U.S. airstrikes against Daesh (Islamic State) in Sirte”.
Oil prices have edged down as more-than-expected-output and high volumes of unsold crude across the globe weighed on markets. Oil prices enjoyed a rally in late spring and early summer with supply disruptions and the kick-off of peak demand season supporting the rally. “Prices began to recover following the publication of the USA inventory data [on Wednesday], and continued to do so into the morning”, Commerzbank said in a note.
A Reuters poll on Monday showed USA crude stockpiles likely fell last week, after a surprise rise in the previous week ended nine straight weeks of drawdowns.
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Meanwhile, the number of rigs operating in US fields added by 44 in July, the most in a month since April 2014, data from oil services company Baker Hughes showed.
