U.S. oil prices rose on Thursday, with U.S. crude surpassing $50 a barrel for the first time since June. The decline in U.S. inventory levels and OPEC’s pledge for the largest producer to reduce supply led to the rise of oil prices.
According to the data of U.S. Energy Information Administration, U.S. oil supplies dropped by 2.98 million barrels by the end of September, which has been falling down for five straight weeks. According to government data, U.S. crude inventory fell below 500 million barrels for the first time since the beginning of this year.
“The drop in crude inventories over the last several weeks is seen by some as a sign that the market’s rebalancing,” said John Kilduff, a partner at a New York hedge fund focused on energy. “It has a lot to do with an increase in crude-oil exports. The local glut is easing but that’s not helping the global glut.”
Last month, OPEC made a pledge to cut supply to 32.5 million to 33 million barrels per day to contract oil supplies and accelerate oil prices. This was the first time OPEC agreed to reduce supply in eight years. According to Goldman Sachs, the oversupply will be remained in 2017, and oil prices will stop at $55 a barrel. Oil prices have increased around 12% since the pledge of OPEC.
However, OPEC didn’t make an agreement on the quota of individual countries, which was expected to be decided on the next OPEC meeting in Vienna on November 30.
Brent Crude Futures were up 54 cents to $52.40 per barrel, and U.S. futures increased 46 cents to $50.29 per barrel on Thursday.