Oil prices inched higher on Thursday after dropping in the previous session. The market was supported by a larger-than-expected decline in U.S. crude inventories and a strong rally in global equities.
Brent crude futures rose 43 cents, or 0.7%, to $63.94 per barrel by 1400 GMT. U.S. West Texas Intermediate futures gained 42 cents, also 0.7%, reaching $59.86.
Both benchmarks recovered after falling about 2% a day earlier. The prior decline came after reports suggested the United States had drafted a framework to push for an end to the Russia-Ukraine conflict. Analysts noted that any progress in the talks could potentially bring more Russian oil back into the market.
Global stock markets also strengthened on Thursday. Oil prices often move in line with equities, and investor sentiment improved after Nvidia reported earnings that exceeded expectations.
New U.S. sanctions targeting Russian oil firms Rosneft and Lukoil will take effect on Friday. Lukoil, however, has until December 13 to sell its international assets.
Oil prices also found support from the demand side. U.S. crude stockpiles fell more than analysts expected, reflecting higher refining activity driven by strong margins and solid export demand.
According to the Energy Information Administration, crude inventories dropped by 3.4 million barrels to 424.2 million for the week ending November 14. Analysts had forecast a much smaller draw of 603,000 barrels.
However, analysts pointed out that gasoline and distillate stockpiles increased for the first time in more than a month. This rise may signal a slowdown in fuel consumption.
Further gains in oil were limited by ongoing concerns about oversupply and a strong U.S. dollar near a six-month high. A stronger dollar makes oil and other commodities more expensive for buyers using other currencies.
