LONDON: Oil prices rose on Thursday as evidence that the Organization of the Petroleum Exporting Countries (OPEC) and other big exporters were cutting production outweighed a sharp rise in US crude and gasoline stockpiles.
Brent crude was up 50 cents at $57.30 a barrel by 1145 GMT after settling up $1.22 in the previous session. US light crude gained 30 cents to $54.18 after climbing by $1.07 on Wednesday.
Both crude oil benchmarks are now near the top of recent price ranges. Brent has spent most of the past two months trading between $53 and $58 a barrel, at a premium of around $2.50 to the US crude futures contract.
“The current sentiment is bullish,” said Tamas Varga, analyst at London brokerage PVM Oil Associates, but added: “We are still firmly within the ranges. I think buyers will shy away if the market jumps another dollar.”
US crude oil inventories rose last week by an unexpected 6.5 million barrels to 494.76 million barrels, the Energy Information Administration said on Wednesday. The build in crude stocks far exceeded analysts’ expectations for an increase of 3.3 million barrels.
Gasoline stocks climbed by 3.9 million barrels, compared with analyst expectations of a 1 million barrel gain. Inventories in the US, the world’s biggest oil consumer, have been near record highs for much of the past year and domestic production is rising as US companies drill for shale oil. But prices have been underpinned by indications that producers from the OPEC and other exporters are cutting output.
The curbs follow an agreement last year by OPEC and other exporters to reduce supplies by a combined 1.8 million barrels per day (bpd) to prop up prices that remain at about half their mid-2014 levels.
A Reuters survey this week found that most key oil producers were sticking to the deal, with compliance above 80 percent.
Russian oil output contracted in January by 100,000 bpd, Energy Ministry data showed on Thursday.Tension between the US and Tehran is also rising after Iran tested a ballistic missile, raising the possibility of future sanctions that could curb Iranian oil supply.