Oil prices surged more than 3 percent after the latest report on USA crude stockpiles eased fears that have permeated the market in recent weeks, helping to drag prices to almost six-month lows.
The development came after Iraq and Algeria joined Saudi Arabia in supporting an extension to OPEC supply cuts.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russian Federation, have pledged to cut output by nearly 1.8 million barrels per day (bpd) during the first half of the year.
OPEC's production last month fell by 18,000 barrels per day, according to secondary sources cited in the report, to 31.73 million barrels per day.
Crude prices rose further in Asia on Thursday, building on overnight gains following an upbeat report on USA inventories.
While U.S. oil inventories fell, the country's crude oil production continued to rise, jumping above 9.3 million bpd last week, in what is now a more than 10 percent increase since its mid-2016 trough.
Brent oil prices are expected to average 53 per barrel in 2017 and 57 per barrel in 2018, the US Energy Information Administration (EIA) said in its May Short-Term Energy Outlook.
"It is hard to see how the day's gains last".
Market participants are closely watching on the energy minister's remarks after Saudi oil chief Khalid Al-Falih said that he was "confident the agreement will be extended into the second half of year and possibly beyond". At 522.5 million barrels, crude stocks were the lowest since February.
"It is starting to become clear that if the objective of the OPEC cuts was to flip the market from surplus into deficit that is now slowly beginning to happen", he said and pointed to the chart below. US light crude oil was up 68 cents at $48.01.
Brent and United States light crude futures contracts closed on Tuesday at their second lowest levels since November 29, the day before OPEC announced it would cut output in the first half of 2017.
In a monthly report, the Organization of the Petroleum Exporting Countries said outside producers would boost supply by 950,000 barrels per day (bpd) this year, up from 580,000 bpd expected previously.
Signs that oil-producing Iraq and Algeria were joining Saudi Arabia backing an extension to supply cuts also supported the price.
Nigeria, which along with Libya is exempt from OPEC cuts, is also expected to see a jump in output soon.
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