Talks in recent months between Opec and Russian Federation about freezing oil production had already helped prices recover.
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Société Générale analyst Michael Wittner said he expected crude markets to continue to be driven by supply disruptions in the two countries, according to the publication. However, with prices now at levels that make drilling economical for some firms, the oil rig count might start rising soon and the decline in USA production may slow.
Global oil benchmark, Brent crude, traded above $50 per barrel its highest level since early November.
“Having said that, the higher price level makes shale oil production lucrative again in many places, which could dampen the fall in production in the coming months”.
The U.S. crude stockpiles dropped by 4.2 million barrels last, according to the U.S. Energy Information Administration, while analysts forecasted a decrease of 2.5 million barrels earlier.
Meanwhile, WTI crude oil futures were 1.2% higher to $49.2 per barrel and Brent crude was up 1.6% to $49.4 per barrel.
Around 2:20 GMT, a barrel of Brent, the European benchmark crude, for July delivery progressed of 27 cents to 50.01 dollars in electronic trading in Asia.
Unplanned outages in Nigeria, Libya and Canada have also been adding to the picture of easing oversupply.
Gasoline futures RBC1 fell almost 1.5 percent to around $1.63 a barrel after the EIA reported that gasoline stockpiles rose by 2 million barrels last week, while analysts are expecting strong demand for gasoline this summer, especially after the Memorial Day holiday next week.
On Wednesday, New York-traded oil futures rallied 94 cents, or 1.93%, after data showed that oil supplies in the US fell more than expected last week.
Ric Spooner, chief market analyst at Sydney’s CMC Markets, suggested Thursday’s gains in oil prices reflected traders’ desire to pass the “psychological barrier” of $50 a barrel. If true, this would have a further impact on Nigerian production.
Oil popped above US$50 a barrel in morning trading today, but lost value as the day progressed. “At the $50-$55 price range there must be a strong possibility of witnessing the peak”.
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They also see that OPEC might not move to cap or cut back production in its June summit in Vienna as some have hoped.
