Oil rose to about $61 a barrel on Wednesday, supported by an industry report showing a drop in U.S. crude inventories, a cut in Libyan exports and an OPEC-led deal to trim output.
The American Petroleum Institute (API) said on Tuesday that U.S. crude inventories dropped by 10.2 million barrels last week, more than analysts had forecast. Official inventory figures are due later on Wednesday.
Brent crude LCOc1, the global benchmark, rose $1.07 to $61.27 by 0947 GMT. It has still fallen by almost a third since early October. U.S. crude CLc1 gained 99 cents to $52.64.
“The oil market is regaining further ground this morning in the wake of a bullish API report,” Stephen Brennock of oil broker PVM said, although he sounded a note of caution.
“After all, the fundamental outlook in early 2019 is still plagued by a supply surplus and is therefore not conducive for a sustained price rally.”
According to Reuters, oil has been supported this week by the supply loss in Libya, which declared force majeure on exports from the country’s largest oilfield on Sunday after tribesmen and state security guards seized the facility.
The Libyan cutback follows last week’s decision by the Organization of the Petroleum Exporting Countries and some non-OPEC producers including Russia to cut supply by 1.2 million barrels per day (bpd) for six months from Jan. 1.