Oil prices rose to near eight-week highs on Wednesday as a fall in US inventories bolstered expectations that the long-oversupplied market was moving toward balance.
Brent crude futures rose 40 cents to 50.60 dollars a barrel by 1213 GMT after rallying more than three per cent on Tuesday.
US West Texas Intermediate futures climbed 50 cents to 48.39 dollars a barrel.
US crude stockpiles fell sharply last week as refineries boosted output, while gasoline inventories increased and distillate stocks decreased, the industry group the American Petroleum Institute said on Tuesday.
Crude inventories fell 10.2 million barrels in the week ending July 21 to 487 million, more than the expected decrease of 2.6 million barrels.
Data from the US Energy Information Administration on Wednesday could provide more support with forecasts of a drop for a fourth week in a row.
Tuesday’s stock draw added to optimism that the long-awaited oil marke rebalancing was underway.
Saudi Arabia said on Monday it would limit oil exports to 6.6 million barrels per day (bpd) in August, down nearly one million bpd from a year earlier.
“The market has been tightening and the refinery margins are strong,” said PetroMatrix Managing Director Olivier Jakob, saying the US stock draw offered a boost to prices.
“You add geopolitical risk premium for Venezuela, and you’ve got a strong market.”
Venezuela, an OPEC member producing about two million bpd of oil, faces deepening economic woes and protests.
President Nicolas Maduro’s adversaries plan strikes to push him to abandon a weekend election.
The United States is considering financial sanctions to halt dollar payments for the Venezuelan oil.
Nigerian output slipped this week as leaks forced Shell to shut a pipeline exporting some 180,000 bpd of oil.
Nigeria, which has been exempted from OPEC-led production curbs, has agreed to cap or cut output when it stabilised at 1.8 million bpd.(Reuters/NAN)