Investing.com – Crude futures settled higher on Thursday, as investors continue to cheer signs that rising demand will offset excess supplies in the second half of the year amid a larger-than-expected draw in U.S. supplies.
On the New York Mercantile Exchange crude futures for September delivery rose 0.61% to settle at $49.04 a barrel, while on London's Intercontinental Exchange, Brent added 1.10% to trade at $51.53 a barrel.
Crude advanced to eight-week highs on Thursday, as investor expectations grew that U.S. crude supplies would continue to drop during the second half of the year, easing the global glut in supply.
The Energy Information Administration (EIA) reported Wednesday, crude and gasoline stockpiles fell by more than expected last week, pointing to an uptick in demand for crude and refinery activity.
Inventories of U.S. crude fell by roughly 7.2m barrels in the week ended July 14, confounding expectations of a draw of about only 2.6m barrels while gasoline inventories, one of the products that crude is refined into, fell by roughly 1m.
Crude prices remained on track to post a weekly gain amid an uptick in sentiment on oil, following news that Saudi Arabia plans to lower crude exports to 6.6 million barrels per day (bpd) in August, almost 1 million bpd below the level last year.
Rising U.S. oil production, however, is expected to limit upside momentum in oil prices, offsetting positive impact of falling U.S. crude stockpiles which has pushed crude prices near the key $50 a barrel level.
“The near-term trend of falling oil stocks is helping fuel a rally in the energy space; however, the trend of rising U.S. oil production remains relentless,” said Tyler Richey, co-editor of the Sevens Report.
“Until that trend begins to show signs of slowing, the upside gains in the energy market will be limited,” he said.