The bullish inventories report, came a day after crude prices dropped 1%, after EIA raised its near-term outlook for USA oil production and revised down its projections for oil prices.
USA light crude oil was $1.81 higher at $47.69 a barrel.
Oil prices rose on Thursday, and Brent was firmly back over $50 a barrel, as a fall in USA fuel inventories and a bigger than expected cut in Saudi supplies to Asia tightened the market.
Brent crude was up 57 cents, hovering at $50.79 per barrel, while US West Texas Intermediate jumped 61 cents to $47.94.
OPEC producers have betrayed their allotted quotas in the past by producing more than they reported; OPEC’s next monthly report will be published Thursday.
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Oil Edges Higher As OPEC Reaches Consensus On Cut Extension
Two OPEC members are exempt from the cut—Nigeria and Libya— and a third member, Iran, was allowed to boost output to a specified level.
OPEC members and their partners in the oil production cut agreements from last November and December have reached a consensus to extend the deal until the end of 2017, the oil ministers of Iraq and Algeria said at a joint news conference.
The initial agreement envisaged OPEC taking off 1.2 million bpd from global supply with Russia and 10 other non-members cutting another 600,000 bpd.
Earlier this month, the energy ministers of Russia and Saudi Arabia also indicated in no ambiguous terms that they would be on board with the extension.
The announcement will likely boost to oil prices, which yesterday jumped on reports from the American Petroleum Institute and the Energy Information Administration, which both estimated U.S. crude oil inventories to have fallen by more than 5 million barrels in the week to May 5.
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Oil rises as countries join OPEC cuts, optimism about U.S. crude draw
U.S. light crude oil ended the day up 50 cents, or 1.6 per cent, at $47.83.
The cartel raised its estimate of total oil supply growth from non-OPEC producers this year to 950,000 bpd from a previous forecast of 580,000 bpd.
Even with this week’s drawdown in U.S. crude stocks, Glickman said the country has a way to go to reduce oversupply.
On Thursday, non-members Turkmenistan and Equatorial Guinea said they would also join the cuts, though they are smaller producers.
On Wednesday, the U.S. Energy Department reported that U.S. crude stockpiles posted their biggest weekly drawdown since December as imports dropped sharply.