Oil gains on surprise drawdown in U.S. crude inventories

Oil gains on surprise drawdown in U.S. crude inventories

Futures were little changed in NY.

"Oil prices are profiting from the general brightening of sentiment on the markets as signs emerge that the trade dispute is easing between the USA and China", analysts at Commerzbank said in a note.

Oil cartel Opec member Qatar's energy minister told Reuters the organisation should stay the course in its joint cuts with non-Opec members led by Russian Federation to allow increased investment in the oil industry.

The trade spat between the U.S. and China has also been escalating, with China replying with tariffs on some US$50 billions of USA imports after the White House announced more tariffs on Chinese products last week; the potential trade war has been rattling financial markets, especially in Asia.

"OPEC's production cuts are working and we are seeing a steady decrease in a global supply glut", Ahn Yea Ha, a commodities analyst at Kiwoom Securities, said by phone.

U.S. WTI futures were up 29 cents per barrel as of 12:26 p.m. HK/SIN, to $63.66 per barrel Brent crude futures were up 32 cents per barrel to $68.34 per barrel. The contract fell 14 cents to $63.37 on Wednesday. Total volume traded today was about 23 per cent below the 100-day average.

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The net long position in futures and options tops 600 million barrels of oil, the data shows, meaning that in the event of a sharper drop in price, sellers may find a dearth of buyers.

OPEC and non-OPEC producers are still committed to cut output by 1.8M barrels per day this year.

With the group reaching an unprecedented degree of compliance with its current output target, Venezuela contributed to a further decline in supplies in March. Analysts had forecast a decline of 1.134 million barrels.

Oil prices steadied on Thursday as an easing of trade tensions between the USA and China and a surprise draw in U.S. crude inventories last week supported the market.

Before the rebound late on Wednesday, after the release of the Energy Information Administration (EIA) inventory data, WTI and Brent had hit two-week lows after China proposed a broad range of tariffs on US exports, feeding fears of a trade war.

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