- US crude stocks show surprise rise in EIA data.
- Rising COVID-19 cases in India and Japan raise demand concerns.
- OPEC+ set for meeting next week.
LONDON: Oil prices bucked the downward trend of recent days to rise on Thursday after the European Central Bank announced stimulus would keep flowing to counter the economic impact of the pandemic while the dollar edged lower.
Brent crude futures rose 38 cents, or 0.58%, to $65.70 a barrel by 1324 GMT, having dropped by $1.25 on Wednesday. West Texas Intermediate (WTI) US crude futures were up 41 cents, or 0.67%, at $61.76 after losing $1.32 the previous day.
The European Central Bank left policy unchanged as expected on Thursday, keeping copious stimulus flowing as it saw reasons to expect a firm rebound of the euro area economy this year.
Meanwhile, the dollar was pinned near multi-week lows against most major currencies as fading gains in US Treasury yields reduced the greenback's interest rate advantage.
In earlier trade, bearish indicators were felt strongly with a surprise build-up in US crude inventories and a resurgence of COVID-19 cases in India and Japan raising demand recovery concerns.
US crude oil stockpiles unexpectedly edged higher by 594,000 barrels in the week to April 16, the Energy Information Administration said on Wednesday. Analysts had expected a drop of 3 million barrels, a Reuters survey showed.
"What is hurting the market sentiment is also the fact that the COVID-19 pandemic is spreading again at a fast pace in India and Japan despite hopes that vaccinations would improve the infection situation," Rakuten Securities analyst Satoru Yoshida said.
India, the world's third-largest oil user, on Thursday reported the world's highest daily increase to date with 314,835 new coronavirus cases.
Japan, the world's No.4 oil importer, is expected to announce a third wave of lockdowns affecting Tokyo and three western prefectures, media reported.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, a group known as OPEC+, are due to meet next week but major changes to policy are unlikely, Russia's deputy prime minister and OPEC+ sources said.
Adding to the underlying bearish sentiment is progress on talks between Iran and world powers to resurrect the 2015 nuclear accord, said PVM oil analyst Tamas Varga. Iranian oil exports could jump and add to crude oversupply should a deal be reached.
"It is the same old story, brighter oil balance for the second half of the year competes with the current gloomy reality," Varga said.
"At the moment the latter is winning, but it is only a question of time before this trend reverses."