NEW YORK: Oil rose about 2 percent on Thursday, making up some of the previous session's losses after US data showed crude oil and gasoline stocks dropped more than expected, yet more analysts cut price forecasts.
US crude stocks fell 6.3 million barrels, the US Energy Information Administration (EIA) said, citing stronger refining activity and reduced imports. That was much more than the draw of about 2.3 million barrels analysts had forecast.
"Inventories were better than the market anticipated and we're seeing gains in crude and products futures as a result," said Andrew Lipow, president of Lipow Oil Associates in Houston.
Heavier-than-expected global supplies have pressured oil prices, and market watchers believe the Organization of the Petroleum Exporting Countries will need to make further output cuts to offset thriving shale production in the United States.
A number of investment banks in the last two weeks have reduced oil price outlooks, citing worries that the glut could extend into next year.
US gasoline stocks dropped 3.7 million barrels in the most recent week, far exceeding the expected drop of 1.1 million barrels. Still, gasoline inventories remain about 6 percent above seasonal averages, so investors will watch for July data to see if demand is strong enough to whittle down those stocks.
Brent crude futures were up $1.19 to $48.98 a barrel, a 2.5 percent gain, as of 11:19 a.m. ET (1519 GMT). The previous session, Brent settled down 3.7 percent, its biggest daily drop in a month.
US West Texas Intermediate crude futures were up $1.15, or 2.5 percent, at $46.28 a barrel.
The price of oil has tumbled from one-month highs just below $50 as evidence showed rising exports and increased production from OPEC, even as the group has pledged to cut output.
Bank of America Merrill Lynch this week joined a chorus of analysts that have cut their outlook for crude prices.
The bank cut its average Brent forecasts to $50 this year and $52 per barrel in 2018, from $54 and $56 before.
Bernstein Research reduced its average Brent forecasts for 2017 and 2018 to $50 per barrel, from $60 and $70 previously.
Saxo Bank said oil prices could rise towards $55 in coming months, but it expected lower prices at the end of the year and into 2018.
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