A survey of analysts by commodity pricing group S&P Global Platts revealed expectations of a 3.5 million barrel draw on crude oil inventories in the United States, the world's leading economy.
Last week, the API reported a large draw of 4.992 million barrels of crude oil, along with an increase in gasoline inventories of 1.87 million barrels.
The West Texas Intermediate for February delivery increased 0.23 USA dollar to settle at 63.80 dollars a barrel on the New York Mercantile Exchange, while Brent crude for March delivery added 0.06 dollar to close at 69.26 dollars a barrel on the London ICE Futures Exchange. That's slightly below the five year average of just over 420 million barrels.
Oil prices posted gains in all the four past sessions this week.
Traders following the trend line pushed the price of oil close to $70 per barrel early Wednesday following signs of a massive drain on US oil inventories.
In the fourth quarter of 2017, the average compliance rate among OPEC members was near 100%.
The oil market has been buoyant for weeks, with USA crude futures at highs not seen since late 2014, and Brent crude less than US$1 per barrel away from a similar milestone.
Mazroui said that draining the oil glut needed time to bring global oil inventories down to the industry's five-year average. The Organization of Petroleum Exporting Countries, with help from big producers like Russian Federation, are working to drain the surplus through managed production cuts, now in their second year. OPEC in December, however, produced about 50,000 barrels per day more than in November.
Oil's rally shows that the Organization of Petroleum Exporting Countries and its allies are succeeding in clearing the glut triggered by the growth of USA shale oil. And oil-supply disruptions and declines in several countries including Venezuela and Libya have propped up prices.
"The ability to hold above $60 per barrel will likely be tested as refinery demand ebbs", he said. Prices rallied after the longest stretch of declines in USA inventories during winter in a decade.
In addition to the OPEC and non-OPEC production cuts of 1.8 million barrels per day (bpd) that are due to last until the end of 2018, oil prices have found support from eight consecutive weeks of USA crude inventory drops.
Ole Hanson, the head of commodity strategy at Saxo Bank, told UPI momentum is carrying the narrative.
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