Light crude traded higher by 1.1% at $47.83 per barrel driven by U.S. inventory drawdown

Light crude

Oil slightly rose by 1 percent on Thursday’s session, in what seems the brimming supply might be reduced. This is due to the rising support for the output reduction by the OPEC and an immense decline from U.S. stockpiles.

According to the U.S. Energy Department last Wednesday, crude inventories in the prior country announced its largest drawdown since December as both imports and stockpiles of refined products rapidly fell.

CFRA Research’s head of energy research Stewart Glickman says that investors are revolving around the positivity today regarding the previous decline in stockpiles. Glickman added that the drawdown might linger as long as they don’t have another build in inventories.

U.S. light crude oil traded higher by 1.1 percent or 50 cents at $47.83 per barrel and international benchmark Brent crude inched 1 percent higher or 50 cents at $50.72 per barrel on Thursday’s session.

On the previous weeks, major producers have extended their support in prolonging last 2016’s deal led by the OPEC, along with non-members to reduce output. Members Algeria and Iraq noted that they were in favor of prolonging the deal which will minimize production by 1.8 million barrels per day (bpd) whilst the first half of 2017.

The Organization of the Petroleum Exporting Countries is set to meet this May 25 to talk about output policy for the second half of this year, and most analysts are expecting the group to prolong the cuts before 2017 concludes. As pledged, the organization has reduced output; however there have been limited signals the supply has dropped suggestively. Producers have blocked several consumers from the cuts, especially Asian countries.

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