Oil rebounded from the lowest close in more than two weeks after industry data showed U.S. crude stockpiles extended declines, easing an inventory overhang.
Futures advanced as much as 1.2 percent in New York after losing 3 percent the previous two sessions. U.S. inventories fell by 8.67 million barrels last week, the American Petroleum Institute was said to report. Government data Thursday is forecast to show a slide of 3 million barrels, the eighth straight drop. Output from Libya, exempt from OPEC’s deal to reduce supply, rose to the highest since October 2014 as production from its biggest field increased.
Oil slid below $50 a barrel last week after the agreement by the Organization of Petroleum Exporting Countries and its allies to prolong supply cuts for nine months disappointed some investors hoping for more. While U.S. stockpiles have edged lower, American production and drilling continues to climb.
“We will continue to see crude inventories falling because of the seasonal impact and that will help support the outlook for oil,” said Ric Spooner, an analyst at CMC Markets in Sydney. “With prices under $50, U.S. production gains might be a bit constrained and that will help with market balancing.”
West Texas Intermediate for July delivery advanced as much as 59 cents to $48.91 a barrel on the New York Mercantile Exchange, and was at $48.76 at 1:09 p.m. in Hong Kong. Total volume traded was about 3 percent below the 100-day average. The contract lost $1.34, or 2.7 percent, to close at $48.32 on Wednesday, the lowest level since May 12. Prices fell 2.1 percent last month.
Brent for August settlement gained as much 55 cents, or 1.1 percent, to $51.31 a barrel on the London-based ICE Futures Europe exchange. The July contract expired Wednesday after dropping $1.53, or 3 percent, to $50.31. The global benchmark crude traded at a premium of $2.20 to August WTI.
U.S. crude stockpiles have declined since hitting a record 535.5 million barrels at the end of March, according to Energy Information Administration data. While inventories shrank, output has climbed to the highest since August 2015.
Oil-market news:
Libyan production increased to 827,000 barrels a day after a boost in output from the Sharara field, according to Mustafa Sanalla, head of the state-run National Oil Corp. U.S. crude imports from OPEC members rose to 3.36 million barrels a day in March, up from 3.18 million a day in February, according to the EIA’s Petroleum Supply Monthly report.
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