Oil prices increased after US production fell, although the prospect of glut in supply in 2018 continues to loom, which has compelled many analysts to reduce their price forecasts.
Brent crude futures increased by 67 cents to touch at $48.46 a barrel, while US West Texas Intermediate crude futures grew 66 cents to $45.79.
Data from the American Petroleum Institute (API) indicated that US crude inventories dropped more drastically than estimated, it was down by 5.8 million barrels in the week to June 30 than the expected 2.3 million barrels.
PVM Oil Associates analyst Stephen Brennock was quoted by Reuters as saying: "A change in fortunes is afoot this morning as the energy complex recoups some losses after an upbeat report from the API on US petroleum stocks."
Bank of America Merrill Lynch was quoted by the news agency as saying: "Against expectations, OECD total oil inventories are still above three billion barrels and the recovery in Libyan and Nigerian supplies, coupled with a fast return of US shale, should prevent steep stock draws ahead."
The bank reduced its average Brent forecasts from $54 in 2017 and $56 in 2018 to $50 this year and $52 in 2018 for a barrel.
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Meanwhile, OPEC’s efforts to reduce price decline too have been undermined by growing output from Libya and Nigeria, which have been exempted from the cuts. Libya’s production currently stands at a four-year high of around one million bpd.