Oil prices rose on Thursday, with Brent returning to above $50 a barrel, after data showing a weekly drawdown in US crude stockpiles offset OPEC's decision not to set a ceiling for its production. US crude stockpiles fell 1.4 million barrels in the last week, driven by a surge in gasoline and diesel demand, the Energy Information Administration said. Although lower than a 2.5 million-barrel draw forecast by analysts, the decline helped crude futures reverse early losses.
Brent was up 43 cents, or 0.4 percent, at $50.15 a barrel by 1:03 pm EDT (1703 GMT), after an intraday low at $48.84. US West Texas Intermediate (WTI) crude futures rose by 29 cents, or 0.6 percent, to $49.29, after tumbling more than $1 earlier.
"It was more a definitive day for the EIA than OPEC," said Carl Larry, director of business development for oil & gas at Frost & Sullivan. "Leaving aside the crude draw, the demand numbers for US gasoline and diesel were a bit too large to ignore."
US gasoline stockpiles fell by 1.5 million barrels, compared with expectations for a 157,000-barrel drop. Inventories of distillates , which includes diesel and heating oil, fell by 1.3 million barrels, versus a forecast 891,000 barrels, the EIA said.
Save for their breakout to 7-month highs above $50 a barrel a week ago, Brent and WTI have largely traded in a $3-$5 range for weeks due to uncertainty over demand and strong technical resistance at around the $50 level.
Crude futures are up more than 80 percent from this year's lows as supply outages in Canada, Venezuela, Libya and Nigeria helped ease a two-year-old glut. Still, analysts said, the key to real recovery was balancing supply-demand from the biggest producers, which include OPEC.
Thus, Thursday's Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna was closely watched for signs the group may revive its collective output quota, as proposed by Saudi Arabia, or introduce individual member production quotas, as suggested by Iran.
But OPEC did neither, although Saudi energy minister, Khalid al-Falih, instead promised the kingdom would not flood the market with extra oil.
His remarks suggested a softening of Riyadh's previous stance, when it rigorously pumped to defend its share of a crude market oversupplied by around 1.5-2.0 million barrels per day.
Iran's Oil Minister Bijan Zanganeh, who has vowed not to concede any crude exports from Tehran until they reach pre-sanction levels, also said he saw no signs other members wanted to ramp up supply.
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