Crude futures rose modestly on Thursday after a larger-than-expected drawdown in U.S. crude stockpiles, with gains checked by a stronger dollar and position squaring ahead of the expiry of the front-month contracts in gasoline and diesel.
Oil has lost more than $10 a barrel over the past month, with global benchmark Brent nearing a six-month trough earlier this week and U.S. futures near four-month lows, amid a global glut, resurgent dollar and recent stock market tumble in China.
But Wednesday’s U.S. government data, showing an unexpectedly large weekly draw of 4 million barrels of crude, more than 20 times what analysts expected, brought the selloff to a grinding halt.
Brent LCOc1 was up 50 cents, or 1 percent, at $53.88 a barrel by 10:27 a.m. EDT (1427 GMT), extending its slight rise in the previous session.
U.S. crude CLc1 climbed 20 cents, or 0.4 percent, to $48.99, after an 81-cent gain on Wednesday.
“There are people still digesting the data from yesterday and that’s feeding into today’s sentiment, but you also have a stronger dollar to deal with,” said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.