Oil prices increase as US production dips
Oil prices have increased to a two-week high following a fall in weekly US production, which eased concerns about supply glut in the global market.
Global benchmark Brent crude futures LCOc1 grew 35 cents to reach $47.66 a barrel, while US West Texas Intermediate (WTI) crude CLc1 increased by 33 cents to reach $45.07, reported Reuters.
ABN Amro senior energy economist Hans van Cleef was quoted by the news agency as saying: "After the steep drop in oil prices of recent weeks, I believe that especially hedge funds saw nice buying momentum and lower US crude production was the trigger to act."
US Government data indicated that the country's crude production fell by 100,000bpd to 9.3 million bpd last week, which is the steepest dip during a week since July 2016.
According to some analysts, the drop was due to temporary factors such as the shutdown of some oil production sites as result of Tropical Storm Cindy in the Gulf of Mexico.
Commerzbank analysts were quoted by the news agency as saying: "These production outages are therefore likely to be made good again in the coming weeks, meaning that a noticeable rise in US oil production can be expected. It is thus doubtful whether (the) price rise will really prove lasting."
Despite cuts of 1.8 million bpd since January by the OPEC and its allies, the glut continues to persist.
In May, OPEC and the other producers agreed to extend the cut through March 2018. Nigeria and Libya have been exempted from the cuts due to unrest.