Crude oil prices rose on Thursday to extend gains from the previous session after official government data showed U.S. stockpiles had eased from record highs.
Prices surged on Wednesday after a slew of market reports and official data offered some hope that a near three-year global glut in oil is coming to an end, albeit more slowly than many have anticipated.
The market was also buoyed after the Federal Reserve raised interest rates in line with expectations but did not signal any pick-up in the pace of further rises.
U.S. West Texas Intermediate (WTI) crude was up 39 cents, or 0.8 percent, at $49.25 a barrel by 0734 GMT, having surged 2.4 percent in the previous session while posting its first increase in eight days.
Brent futures climbed 47 cents, or 0.9 percent, to $52.28. They had their first increase in seven days on Wednesday, gaining 1.7 percent.
The benchmarks have bounced off their lowest levels since the Organization of the Petroleum Exporting Countries (OPEC) agreed to cut output at the end of last year, with an initial price surge having evaporated as stockpiles remained high.
Global oil inventories rose for the first time in six months in January, despite the OPEC agreement, the International Energy Agency said in its monthly oil report on Wednesday.
But data from the U.S. Energy Information Administration (EIA) showed U.S. crude stocks fell last week, the first weekly decline after nine straight increases.
Crude inventories fell 237,000 barrels in the week to March 10, contrary to analysts’ forecasts for an increase of 3.7 million barrels.
The inventories have been closely watched by oil traders to see whether the OPEC reduction is reducing the global glut.
“While the large (global) inventory build seems counter-intuitive given the cuts to OPEC supply, there are good reasons for this,” Bernstein Energy said in a note on Thursday, citing seasonal declines in demand, time lags between cuts and deliveries, and traders tapping floating storage.
Oil bulls were also encouraged after the IEA said demand should overtake supply in the first half of this year.
The market as well has been impressed with OPEC’s level of compliance with the cuts and these are likely to hold, BMI Research said.
“There are early signs that March compliance will also be strong and could even exceed the previous two months,” BMI said.