Oil climbed on Thursday in a indication that investors are wary of pushing the market lower in reaction to an unusually large increase in U.S. stocks of processed products which has increased concern about the requirement outlook.
Brent crude futures were at $61.55 a barrel, up 33 cents by 1008 GMT.
U.S. West Texas Intermediate (WTI) crude futures were at $56.16 a barrel, up 20 cents, after having fallen nearly 3 percent on Wednesday.
U.S. crude oil inventories dropped by 5.6 million barrels in the week to Dec. 1, to 448.1 million barrels, placing stocks below seasonal levels in 2015 and 2016.
But gas stocks rose 6.8 million barrels, to 220.9 million barrels, according to the report by the U.S. Energy Information Administration (EIA), greater than analyst expectations for a profit of 1.7 million barrels.
“We had a wonderful run to the drawback yesterday and it seems for now that it is ‘take your brief profits shortly and maintain your longs for more’,” Saxo Bank senior director Ole Hansen said.
“We’re in the time of year when calculating will dry up and people are more concerned about reducing risk than adding it.”
PVM Oil Associates said in a note: “Inventories in different products were down by 5.36 million barrels over the week. The net result is a 2.52-million barrel draw total commercial petroleum inventories.”
“Current levels are almost 7 percent below last year and the surplus to the average is just 3.9 per cent. On balance, the weekly data wasn’t as bad as it appears at first sight.”
But more troubling for the bulls, U.S. oil production rose by 25,000 barrels per day (bpd) to 9.71 million bpd, the greatest since monthly figures demonstrating the United States produced more than 10 million bpd in the early 1970s.
Soaring U.S. output threatens to undermine efforts led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia to deliver generation and demand into equilibrium following years of oversupply.
Sukrit Vijayakar, managing director of energy consultancy Trifecta said there were “darker shadows over the speed of rebalancing, if at all any is occurring.”