SINGAPORE: Oil prices rose on Thursday, and Brent was firmly back over $50 per barrel, as a fall in US crude inventories and a more severe than expected cut in Saudi supplies to Asia tightened the market.
Brent crude futures, the international benchmark for oil prices, were at $50.33 per barrel at 0039 GMT on Thursday, up 11 cents, or 0.2 per cent, from their last close.
US West Texas Intermediate (WTI) crude oil futures were trading at $47.46 per barrel, up 13 cents, or 0.3 per cent from the last settlement.
“We saw the biggest draw in inventories for the year last week with stockpiles down more than 5 million barrels.
And it looks like Opec’s production cut is finally biting,” said Greg McKenna, Chief Market Strategist at CFD and FX provider AxiTrader.
The Organization of the Petroleum Exporting Countries (Opec) and other producers including Russia have pledged to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year.
So far, however, there have been few signs that global markets are actually tightening as producers shielded their biggest customers, especially in Asia, from the cuts.
But after Brent prices fell back below $50 per barrel last week, analysts said producers felt forced to act.
Saudi Arabia, the world’s biggest oil exporter, has notified several Asian refiners of its first cuts in crude allocations for regional buyers since Opec’s output reduction took effect in January.
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