SINGAPORE — Brent crude rose above $70 a barrel on Thursday, making small gains along with US futures, as a fall in crude stockpiles in the US supported prices.
US crude stocks fell more than expected last week as refineries hiked output, data from the Energy Information Administration (EIA) showed on Wednesday.
Brent added 45c to $70.37 a barrel by 2.20am GMT.
The contract settled below $70 on Wednesday after a report suggested Saudi Arabia expected still lower prices for oil.
US crude futures rose 34c to $67.72 a barrel, after a 50c gain in the previous session.
Analysts expect prices to head lower despite recent steep falls as US shale oil production growth stays strong while the Organisation of the Petroleum Exporting Countries (Opec) has decided not to cut supply, preferring to protect market share.
Markets could be going through a temporary reprieve after “bearish exhaustion”, The Schork Report editor Stephen Schork said.
However, he said it was too early to say how low oil prices could fall. Brent’s failure to break resistanceat $71.42 could encourage new selling, Mr Schork said.
Investors are turning their focus to US data for clues on the strength of demand in the world’s largest economy and oil consumer. Economic resilience in the US has supported global stocks with the Dow and S&P scoring record highs overnight.
In the US, crude inventories fell by 3.7-million barrels in the past week, compared with analysts’ expectations for an increase of 1.3-million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub fell by 694,000 barrels, EIA said.
This partly helped narrow the spread between Brent and West Texas Intermediate (WTI) to less than $3 a barrel on Wednesday, the weakest in seven weeks.
Mr Schork said refinery throughput was surging after the refinery maintenance season and cheap retail petrol would create a lot of short-term demand this holiday season.