Brad Quick | CNBC
An oil worker stands by a rig near Williston, North Dakota.
U.S. crude topped $50 a barrel for the first time
in five weeks on Thursday, building on recent gains after forecasts for
stronger oil demand by the International Energy Agency.
Benchmark Brent crude
was up 56 cents, or 1 percent, at $55.72 a barrel by 9:24 a.m. ET (1324
GMT). The contract was trading at its highest levels since April, after
rising 89 cents or 1.6 percent on Wednesday.
U.S. West Texas Intermdediate crude
rose 75 cents, or 1.5 percent, to $50.05, after gaining 2.2 percent in
the previous session. WTI popped above its 200-day moving average level
of $49.55 earlier in the session. It has not breached that level on an
intraday basis since Aug. 10.
Brent has now climbed by more than $10 a
barrel over the past three months and is close to where it was at the
beginning of the year, trading between about $55 and $57.
"By breaking $55 a barrel, Brent
is moving back to the price range of January/February," said Olivier
Jakob, analyst at energy markets consultancy Petromatrix in Zug,
Switzerland.
Wednesday's gains followed an IEA report which
raised its estimate of 2017 world oil demand growth to 1.6 million
barrels per day (bpd) from 1.5 million bpd.
The IEA said a global oil surplus was beginning to shrink due to stronger-than-expected European and U.S. demand growth, as well as production declines in OPEC and non-OPEC countries.
"Stronger demand and supply restrictions from OPEC and Russia are the main reasons for the oil price upsurge," said Forex.com analyst Fawad Razaqzada.
The supply side of the equation also looks promising, Barclays Research said.
"Unrest in Iraq and Venezuela should keep output there in check, regional crude oil contangos have dissipated, and stocks are gradually declining," it said.
That said, "a softer market balance is in store for next year, which should ensure an OPEC/non-OPEC deal remains in place beyond March 2018", Barclays added.
The Organization of the Petroleum Exporting Countries and other producers, including Russia, have agreed to reduce crude output by about 1.8 million bpd until next March in an attempt to support prices.
The IEA said a global oil surplus was beginning to shrink due to stronger-than-expected European and U.S. demand growth, as well as production declines in OPEC and non-OPEC countries.
"Stronger demand and supply restrictions from OPEC and Russia are the main reasons for the oil price upsurge," said Forex.com analyst Fawad Razaqzada.
The supply side of the equation also looks promising, Barclays Research said.
"Unrest in Iraq and Venezuela should keep output there in check, regional crude oil contangos have dissipated, and stocks are gradually declining," it said.
That said, "a softer market balance is in store for next year, which should ensure an OPEC/non-OPEC deal remains in place beyond March 2018", Barclays added.
The Organization of the Petroleum Exporting Countries and other producers, including Russia, have agreed to reduce crude output by about 1.8 million bpd until next March in an attempt to support prices.
This week's gains came despite U.S. data showing another big build in U.S. crude inventories due to Hurricane Harvey.
Data from the Energy Information
Administration shows a build in U.S. crude inventories last week of 5.9
million barrels, exceeding expectations.
U.S. gasoline stocks slumped by
8.4 million barrels, the largest weekly decline since the data was first
recorded in 1990. U.S. gasoline futures extended declines on Thursday,
with demand expected to slip because of the impact of Hurricane Irma on
Florida and Georgia.
U.S. distillate stocks fell by 3.2 million barrels.
ExxonMobil Corp said it was
restarting its 362,300-barrels-per-day Beaumont, Texas, refinery for the
first time since it was shut by Harvey.
— CNBC's Tom DiChristopher and Gina Francolla contributed to this report.
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