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Brent crude oil was up 38 cents at $52.19 a barrel by 1050 GMT,
recovering from Tuesday's slide to $50.25, its lowest level
since Nov. 30 when the Organization of the Petroleum Exporting
Countries announced plans to cut supplies.
U.S. light crude oil was up 37 cents at $49.23 a barrel, also
climbing from a three-month low.
The rebound has been cautious, with investors looking for
evidence that OPEC-led supply cuts will bring a sustained
drawdown in stockpiles since OPEC and non-OPEC producers began
cutting back output on Jan. 1.
"The dollar is weaker due to the U.S. Fed. I don’t think it is
going to be enough to bring some follow-through buying to crude
oil. We need something more substantial," said Olivier Jakob of
Swiss consultancy Petromatrix.
The U.S. Energy Information Administration said on Wednesday
that crude oil stocks fell 237,000 barrels in the week to March
10, defying forecasts of a 10th weekly rise. [EIA/S]
Further support came on Wednesday from the International Energy
Agency (IEA). Although global inventories rose in January, the
agency said the oil market could be in deficit by 500,000
barrels per day (bpd) in the first half of 2017.
OPEC has broadly complied with its commitment to cut 1.2 million
bpd in the first half of the year, but investors have been
unnerved as stocks have kept climbing. The IEA called for
patience, saying cuts would take time to feed through. [IEA/M]
Thursday's oil price rise seemed largely powered by a dip in the
dollar, helping commodities across the board. A decline in the
U.S. currency makes dollar-denominated commodities less
expensive for holders of other currencies.
OPEC has said it wants to see inventories fall below the
five-year average for industrialized nations. Stephen Brennock
of PVM oil brokerage said this would be achieved only if OPEC
kept supply reductions beyond the first half of 2017.
"Unless OPEC agrees to extend its self-imposed production
restraint beyond the June deadline, any claims of victory in the
battle against the oil glut will be premature," Brennock said.
OPEC member Kuwait said this week that it was ready to prolong
the deal to reduce supply. But OPEC heavyweight Saudi Arabia,
the world's biggest oil exporter, has said it is too early to
consider an extension.
(In sixth paragraph, story corrects name to Energy Information
Administration, not Agency.)
(Additional reporting by Aaron Sheldrick in Tokyo; Editing by
Christopher Johnson and Dale Hudson)
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