Crude oil futures edged up further during mid-morning trade in Asia Thursday, holding on to support from a surprise draw reported in US crude inventories.
At 10:35 am Singapore time (0235 GMT), ICE June Brent crude futures were up 23 cents/b (0.31%) from Wednesday's settle at $73.71/b, while the NYMEX May light sweet crude contract was up 24 cents/b (0.35%) at $68.71/b.
According to data released by the US Energy Information Administration Wednesday, US crude inventories fell 1.071 million barrels to 427.567 million barrels for the week ended April 13.
Analysts surveyed Monday by S&P Global Platts were looking for US crude stocks to have risen by 625,000 barrels for the same period.
"Oil prices were seen rising on news of declining inventories," ANZ analysts said in a note Thursday.
A large decline in net crude imports drove stocks lower, offsetting an increase in production and less refinery activity, analysts said.
Imports dropped 720,000 b/d last week to 7.93 million b/d, while exports rose 544,000 b/d to 1.749 million b/d.
Draws reported in US gasoline and distillate inventories also helped in keeping prices higher, analysts added.
For the week ended April 13, US gasoline inventories were down 2.968 million barrels to 235.967 million barrels, according to EIA data. Analysts were looking for a draw of 1.6 million barrels.
Distillate stocks, on the other hand, fell 3.107 million barrels last week to 125.34 million barrels, according to EIA data, while analysts had expected a decline of 1.9 million barrels.
"In a nutshell, the fall in inventories for the latest week suggest that US oil demand remains robust, a key aspect that is much needed to give crude oil prices a credible support at current levels," OCBC Commodity economist Barnabas Gan said.
But Gan also added that the recent rally in crude prices was fueled not just by strong fundamentals, but also by increased geopolitical tensions in the Middle East.
"The rally could be short-lived and once the dust settles prices may reverse back some of their gains," he added.
Meanwhile, market participants will look out for the much awaited Joint Ministerial Monitoring Committee meeting scheduled to be held on Friday at Jeddah between the energy ministers of OPEC countries and Russia, with discussions likely to be centered around the possible extension of the OPEC-led cuts beyond 2018.
Russia earlier this week had commented that it was committed to its OPEC pact with Saudi Arabia, providing positive sentiment to the market.
Investors, however, remain skeptical if OPEC and its allies would continue to limit supply, given the latest report published by the International Agency which showed that OECD oil stocks fell by 25.6 million barrels to 2.84 billion barrels in February -- the lowest since April 2015.
As of 0235 GMT, the US Dollar Index was up 0.05% at 89.41
