Oil prices rose on Thursday to their highest since March, as a drawdown of U.S. crude inventories and output cuts by major producers helped ease concerns about a supply glut, offsetting fears over the economic fallout from the COVID-19 epidemic.
Brent crude futures for July delivery LCoc1 were trading up 62 cents, or 1.7%, at $36.37 per barrel at 0550 GMT, rising for a second day.
U.S. West Texas Intermediate (WTI) crude futures for July CLc1 were up 61 cents, or 1.8%, at $34.10 a barrel, extending its gains into a sixth straight session.
Both prices are at their highest since March 11.
U.S. crude inventories USOILC=ECI fell by 5 million barrels last week, against expectations in a Reuters poll for a 1.2 million-barrel rise, Energy Information Administration (EIA) data showed, while stocks at the Cushing, Oklahoma, delivery hub dropped by 5.6 million barrels.
“While signs that WTI storage pressures are abating is positive for prices, the latest report shows that the fall in stocks owes more to supply factors than growing product demand,” Capital Economics said in a note issued on Wednesday.
Prices have been boosted lately by shipping data showing the Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies, a group known as OPEC+, are complying with their pledge to cut 9.7 million barrels per day (bpd).