Oil prices were higher during European morning hours on Thursday, rising back toward a seven-week high after data overnight showed a surprise drop in U.S. crude supplies.
The U.S. West Texas Intermediate Crude April contract rose 81 cents, or 1.5%, to $54.39 a barrel by 4:15AM ET (09:15GMT), after losing 74 cents, or 1.4%, on Wednesday. The U.S. benchmark reached $55.03 on Tuesday, a level not seen since January 3.
After markets closed Wednesday, the American Petroleum Institute said that U.S. oil inventories surprisingly fell by 884,000 barrels in the week ended February 17, breaking a trend of six-straight builds.
The oil storage hub of Cushing, Oklahoma, saw a draw of 1.73 million barrels, the sixth decline in seven weeks.
The API report also showed a decline of 893,000 barrels in gasoline stocks, while distillate stocks dropped a sharp 4.23 million barrels.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 11:00AM ET (16:00GMT) Thursday.
The report comes out one day later than usual due to Monday’s President’s Day holiday.
Elsewhere, Brent oil for April delivery on the ICE Futures Exchange in London added 85 cents, or nearly 1.6%, to $56.70 a barrel. The global benchmark dropped 82 cents in the prior session.
Oil prices have been trading in a narrow $5 range around the mid-$50s over the past two months as sentiment in oil markets has been torn between hopes that oversupply may be curbed by output cuts announced by major global producers and expectations of a rebound in U.S. shale production.
Elsewhere on Nymex, gasoline futures for March rose 1.8 cents, or 1.2%, to $1.537 a gallon, while March heating oil jumped 2.3 cents ,or 1.5%, to $1.653 a gallon.
Natural gas futures for April delivery added 3.2 cents, or 1.2%, to $2.734 per million British thermal units, as market participants looked ahead to weekly storage data due later on Thursday, which is expected to show a draw of 85 billion cubic feet in the week ended February 17.
That compares with a withdrawal of 114 billion cubic feet in the preceding week, 117 billion a year earlier and a five-year average drop of 158 billion cubic feet.