Investing.com - West Texas Intermediate oil futures rose for the second straight session on Thursday, as concerns over a supply glut in the U.S. eased after data showed that crude inventories fell for the third consecutive week last week.
On the New York Mercantile Exchange, crude oil for July delivery tacked on 36 cents, or 0.6%, to trade at $59.34 a barrel during European morning hours. Prices held in a range between $58.71 and $59.38.
A day earlier, Nymex oil rallied 99 cents, or 1.71%, to end at $58.98 after the U.S. Energy Information Administration said that crude oil inventories fell by 2.7 million barrels last week to 482.2 million, compared to expectations for a drop of 1.1 million barrels to 483.8 million.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, fell by 241,000 barrels, while domestic crude oil production fell by 112,000 barrels to 9.26 million barrels a day, the EIA said.
U.S. oil futures have been well-supported in recent weeks as an ongoing collapse in rigs drilling for oil in the U.S. added to expectations that shale oil production has peaked and may start falling in the coming months.
According to industry research group Baker Hughes (NYSE:BHI), the number of rigs drilling for oil in the U.S. fell by 8 last week to 660, the 23rd straight week of declines and the lowest level since September 2010.
Oil traders have been paying close attention to the shrinking rig count in recent months for signs it will eventually reduce the glut of crude flowing into the market.
But market analysts also warned that the recent rally in the oil market could prompt some producers to dial up their output if prices hold above more than $60 a barrel.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.3% at 95.37, holding below Wednesday’s highs of 95.94.
The greenback weakened after the minutes from the Federal Reserve’s April meeting published Wednesday showed that most officials believed a June rate hike would be premature, after recent data showed that the economy grew just 0.1% in the first quarter.
According to the minutes, the timing of a rate hike "would depend on the evolution of economic conditions and the outlook".
Later in the day, the U.S. was to release a string of reports including initial jobless claims, existing home sales and a look at manufacturing activity in the Philadelphia region.
Investors were also turning their attention to Friday’s U.S. inflation data and a speech by Fed Chair Janet Yellen for fresh indications on how the economy is performing.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for July delivery advanced 26 cents, or 0.4%, to trade at $65.29 a barrel. On Wednesday, Brent prices jumped $1.01, or 1.58%, to close at $65.03.
The spread between the Brent and the WTI crude contracts stood at $5.95 a barrel early on Wednesday, compared to $6.05 by close of trade on Wednesday.
Data released earlier showed that China's HSBC Flash Manufacturing Purchasing Managers' Index inched up to 49.1 this month from 48.9 in April, missing expectations for an increase to 49.3 and below the 50-point level that separates growth in activity from contraction.
The disappointing data added to speculation policymakers will have to introduce further easing measures to jumpstart the economy amid lackluster growth.
Since November, the People's Bank of China has introduced a series of stimulus measures, including lowering interest rates three times and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.