On the other hand, USA rig count continues to increase and demand forecasts for 2017 have been lowered implying that significant headwinds exist and will prevent WTI from breaking $55 easily. Oil is now trading at $51.21 in a light trading volume of 1593, near resistance 51.26, which could test its nearest resistance if prices will continue to retreat.
The API reported surprisingly that gasoline inventories increased, while crude oil stocks fell by less than expected, said Sukrit Vijayakar, director of energy consultancy Trifecta.
The price increases on Thursday followed a more than 3.5 per cent drop in both crude benchmarks during the previous session after the EIA reported surging gasoline inventories as well as another rise in USA crude oil production to 9.25 million barrels per day (bpd), up nearly 10 per cent since mid-2016. Last November, OPEC countries, and other 11 participating non-OPEC countries agreed to slash production by 1.8 million barrels per day by the first half of 2016.
Increasing U.S. output is proving a constant source of irritation to attempts by the Organization of the Petroleum Exporting Countries (OPEC) and other major oil producers to curb output and sustain a rally in prices in a market that has been oversupplied since mid-2014.
The Energy Minister of the United Arab Emirates said he saw healthy oil demand growth this year and believed inventories would fall, but it would take more time to rebalance the market. USA rig counts are up for 14 straight weeks returning output to levels not seen since April 2015. Its production, however, rose to 10 million BPD in February, up from 9.75 million BPD in January, as domestic refiners processed more oil. Output in the lower-48 states rose 21,000 barrels a day to 8.72 million, also the highest since August 2015. "Ahead of summer driving season, it is surprising to see a lag in demand".
Top court questions govt over making Aadhaar mandatory for procuring PAN cards
In 2015, the Supreme Court had issued an order saying that Aadhaar can not be made mandatory for government schemes. The apex court said it will hear the plea challenging the government's move on 25 April.
OPEC will meet on May 25 to assess markets and to decide whether to extend the deal or not.
Then in December, non-OPEC producers led by Russian Federation agreed to cut their own output to 558,000 barrels per day.
USA inventories now sit at 532.3 million barrels, only down about 3 million units from the record reached in March. "The reasons are twofold".
Oil was down 3.66% to $50.49 a barrel, while Brent Crude was down 3.55% to $52.94 a barrel.
The Organisation of the Petroleum Exporting Countries (OPEC) is confident that production cuts agreed with non-members to prop up prices will lead to a recovery in the market, its chief said on Wednesday.