Oil prices have increased due to an unexpected drop in US gasoline stock, despite the global crude market continuing to be bloated and put prices under pressure.
Brent crude futures LCOc1 gained 40 cents to reach $55.52 a barrel, while US West Texas Intermediate (WTI) crude CLc1 improved by 39 cents to trade at $52.73, reported Reuters.
The US Energy Information Administration (EIA) reported that gasoline inventory fell by 869,000 barrels last week to settle at 256.2 million, against experts’ prediction of a 1.1 million rise.
Due to oversupply, sharp improvement in oil prices in the near-future may not occur.
EIA previously reported that commercial crude inventories in the US increased by 13.8 million barrels.
Finance company Goldman Sachs was quoted by the Reuters as saying: “The 4Q16 global oil market surplus led to further rises in global inventories in January, and as a result the draws that we expect will start from a high base.
“US production has also rebounded faster than our rig modeling suggested. And we view the faster shale rebound as creating downside risk to our 2018 WTI price forecast of $55 per barrel, but not to our expectation that the global oil market will shift into deficit in 1H17.”
The rise in US output had lessened the impact of production-cut by OPEC and Russia.
Since early January, Brent and WTI witnessed a 5% fall in prices.