Oil prices were up by the most in almost a month on Thursday after a report from an industry group showed a surprise drop in US crude stocks and as investors awaited the official numbers from the Energy Information Administration.
Brent crude, the global oil marker, rose 2 per cent to $56.95 a barrel and was on track for its biggest one-day rise since January 26. Meanwhile, West Texas Intermediate, the US oil standard, rose 2 per cent to $54.66 a barrel, for its biggest one day gain since the start of the month.
The rally came after a report from the American Petroleum Institute, an industry group, showed that weekly crude supplies fell by 884,000 barrels and gasoline stocks fell by 893,000 barrels.
Economists currently expect the official report from the Energy Information Administration, that is due later on Thursday, to show a build of 3.4m barrels of crude and a 1.2m draw in gasoline stocks. Last week’s reports showed that at 518.1m barrels, stocks of crude sitting in commercial tanks are the highest in records dating to the early 1980s.
Oil prices have stabilised since Saudi Arabia-led Opec and other non-members like Russia agreed late last year to curb output. And while recent data show that these cuts have exceeded market expectations, analysts warn that it is unlikely to be enough to translate into a large inventory draw by the second quarter because of the recent surge in US drilling activity and a rise in oil stocks.