Oil futures nudged higher on Thursday, building on a rebound overnight after investors ultimately took a bullish view on weekly U.S. inventory data.
Brent crude, the global oil benchmark, rose 0.3% to $52.54 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.3% at $49.75 a barrel.
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The Energy Information Administration reported a 1.5-million-barrel drop in U.S. crude inventories last week, below analysts' expectations. However, "a strong increase in demand was enough to appease the bullish investors," said ANZ Bank. Refiners' capacity utilization jumped to 95.4% last week, the government also said.
Brent crude prices hit a two-month high on Tuesday, having climbed steadily in recent weeks on signs that the market is rebalancing after more than three years of oversupply.
"A decent chunk of the global inventory overhang has been run down and that process continues and is picking up pace," said Richard Mallinson, analyst at consultancy Energy Aspects.
Production caps led by the Organization of the Petroleum Exporting Countries and Russia, along with strong demand, are helping dent still-historically high global stocks, he added.
JBC Energy revised its forecast for global oil product demand growth in 2017 to 1.46 million barrels a day, compared with its January forecast of 1.1 million barrels a day, due to strong demand for gas oil and gasoline in some countries.
Market participants continued to monitor tensions in Venezuela, where the threat of U.S. sanctions on the oil sector remains.
"The market is still watching for how that might unfold and trying to understand if any sanctions were imposed to what extent would it reduce Venezuelan production or exports," said Mr. Mallinson, adding that issues facing the industry included a lack of investment, maintenance and a shortage of equipment.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract--fell 0.1% to $1.64 a gallon. ICE gas oil changed hands at $491.25 a metric ton, UP $3.00 from the previous settlement.
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(END) Dow Jones Newswires
August 03, 2017 06:10 ET (10:10 GMT)