Oil prices have improved significantly on signs that supply is gradually tightening globally, especially in the US where crude stocks fell by nearly 13% from March to 466.5 million barrels.
Brent crude oil LCOc1 gained 40 cents at $52.06 per barrel, while the US light crude CLc1 traded 35 cents higher at $47.72 a barrel, reported Reuters.
Forex.com market analyst Fawad Razaqzada told the news agency: “If the downtrend in oil inventories is maintained, then a bullish case can be made for oil, especially given the ongoing supply restrictions from OPEC and Russia.”
Analysts stated that despite the US crude production breaking through 9.5 million barrels per day (bpd), the growth may stall as energy companies in the country have started reducing the number of rigs drilling for new oil.
According to a Reuters’ survey, the US crude stocks are also expected to fall for the eighth consecutive week by 3.4 million barrels.
Investors are watching for the official data to be published by the Energy Information Administration on crude stocks.
Between January this year and March next year, the Organization of the Petroleum Exporting Countries and some non-OPEC producers have also agreed to reduce production by 1.8 million to rebalance the market.