Investing.com - Oil prices rose on Thursday morning in Asia, lifted by an unexpected draw on U.S. crude inventories.
Crude Oil WTI Futures for May delivery were trading at $65.27 a barrel in Asia at 10:40PM ET (02:40 GMT), up 0.15%. Brent Oil Futures for May delivery, traded in London, were up 0.07% at $69.52 per barrel.
U.S. crude inventories fell 2.6 million barrels in the week to March 16, to 428.31 million barrels, the Energy Information Administration (EIA) said on Wednesday.
The fall in U.S. crude inventories was due to a fall in imports by around 500,000 barrels per day (bpd) to an average of 7.08 million bpd last week, and a rise in exports by 86,000 bpd to an average of 1.57 million bpd.
Also supporting prices is the ongoing dollar weakness which makes oil cheaper in global markets, spurring demand.
Middle East tensions between Saudi Arabia and Iran, as well as concerns that the U.S. will reimpose sanctions on Iran, are also supporting oil markets.
If the U.S. does reimpose sanctions on Iran, that would likely result in a 250,000 to 500,000 bpd drop in its exports by year-end, according to energy consultancy FGE.
Further supporting oil prices is the supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC). OPEC has been cutting output by around 1.2 million bpd since January 2017, and the pact is scheduled to go on for the rest of 2018.
OPEC said on Wednesday that the cuts were close to having the desired effect of reducing global inventories to five year averages, although it gave little detail.
However, the U.S continues to ramp up its crude production, which climbed to a new record of 10.4 million bpd last week. Having already surpassed top exporter Saudi Arabia in production, the U.S. is expected to overtake Russia as the top producer by late 2018, with output of more than 11 million bpd. This puts a drag on OPEC efforts to prop up prices.
Non-OPEC supply, led by the U.S., will grow by 1.8 million bpd this year, while demand will only grow by about 1.5 million bpd.