Oil futures climbed nearly one percent on Thursday after data showed a surprise decline in U.S. crude stocks as imports fell, supporting the view that a global glut is ending.
The U.S. West Texas Intermediate crude April contract had risen 50 cents, or 0.9 percent, to $54.09 a barrel by 0229 GMT.
Brent crude was up 51 cents, or 0.9 percent, at $56.35, although both benchmarks were still well within recent tight ranges.
Crude inventories fell by 884,000 barrels in the week to February 17 to 512.7 million, compared with analyst expectations for an increase of 3.5 million barrels, data from industry group the American Petroleum Institute showed on Wednesday.
That added to optimism earlier in the week when the Organisation of the Petroleum Exporting Countries said a deal with other producers including Russia to curb output was showing a high level of compliance.
However, for prices to break out of their trading ranges, the market needs to see signs that OPEC inventories are falling, said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.
“It’s a battle between how quick OPEC can cut without shale catching up,” Nunan said, referring to U.S. drilling in shale formations that has shown an upsurge after prices rose this year.
“What OPEC really has to do is get the inventories down,” he said.
Eleven non-OPEC oil producers that joined the OPEC deal have delivered at least 60 percent of promised curbs so far, OPEC sources said on Wednesday, higher than initially estimated.
In the United States, crude stocks at the Cushing, Oklahoma, delivery hub were down by 1.7 million barrels, while U.S. crude imports fell last week by 1.5 million barrels per day (bpd) to 7.398 million bpd, according to the API.
Official data from the U.S. Department of Energy’s Energy Information Administration (EIA) is scheduled to be released at 11 a.m. EST (1600 GMT) on Thursday, a day later than normal because of a holiday Monday.
“All attention now shifts to the EIA crude inventory figures due out this evening in the U.S., with the market looking for an increase of 3.4 million barrels,” said Jeffrey Halley, senior market analyst at OANDA in Singapore.
“A big miss either way will set the short term direction for crude,” Halley concluded.