LONDON: Oil prices rose on Thursday after a larger-than-expected draw in U.S. crude and gasoline stocks and figures showing a decline in U.S. oil production.
Benchmark Brent crude LCOc1 was up 80 cents a barrel at $54.18 by 1025 GMT (0625 EDT), after settling 8 cents higher in the previous session. U.S. crude CLc1 rose 30 cents to $49.09, after ending the previous session up 81 cents, or 1.7 percent.
But the gains were restrained by another rise in the value of the dollar, making fuel more expensive for holders of other currencies.
The dollar hit a one-week high ahead of U.S. economic growth data likely to reinforce expectations that the Federal Reserve will raise interest rates as early as September. [FRX/]
“U.S. stocks data were supportive but the dollar strength is putting a brake on the market,” said Carsten Fritsch, senior oil analyst at Commerzbank.
Oil prices have more than halved over the last year as key Middle East producers have pumped near record levels, creating a huge oversupply and filling storage tanks around the world.
The Organization of the Petroleum Exporting Countries pumped around 3 million barrels per day (bpd) more than demand in the second quarter and shows no sign of trimming production to prop up prices.
Lower prices have encouraged many oil companies to cut back on drilling and this has started to balance some markets, particularly in the United States, where some shale producers are now operating below breakeven, analysts say.
