Crude prices rose further in Asia on Thursday, building on overnight gains following an upbeat report on U.S. inventories.
On the New York Mercantile Exchange, crude futures for June delivery rose 0.49% to $47.56 a barrel, while on London's Intercontinental Exchange, Brent gained 0.44% to $50.44 a barrel.
Overnight, crude futures settled higher on Wednesday as investors cheered the latest report from the Energy Information Administration (EIA) showing U.S. crude inventories fell more than expected.
Crude prices surged back above $47 to settle higher as investors' jitters concerning rising levels of U.S. oil output eased after the EIA revealed a bullish inventories report. For the week ended May 3, the EIA said crude oil inventories fell by 5.25 million barrels, which confounded expectations of a draw of 1.79 million barrels.
Meanwhile, gasoline inventories dropped by only 0.150 million against expectations for a draw of 0.538 million barrels, while distillate stockpiles fell by 1.6 million barrels, compared to expectations of a 1 million decline. The bullish inventories report came a day after crude prices dropped 1%, after EIA raised its near-term outlook for U.S. oil production and revised down its projections for oil prices.
The EIA raised its U.S. oil production forecast to an average of 9.3 million barrels per a day (bpd) in 2017 and 10 million bpd in 2018, while it lowered its projection for average oil prices in 2017 to $52.60 a barrel for Brent and $50.68 for WTI.
Elsewhere, investors continued to monitor comments from energy ministers after Saudi oil chief Khalid Al-Falih said on Monday he was "confident the agreement will be extended into the second half of year and possibly beyond."
Oil prices have erased the gains achieved since November, when OPEC and other producers, including Russia, agreed to cut output by about 1.8 million barrels per day (bpd). OPEC is expected to decide at talks on May 25 whether to extend the current deal to cut production for an additional six months to the end of the year.