By Christopher Alessi
Oil prices rose Thursday after closing at a three-week low, helped by a reduction in U.S. crude stockpiles.
Light, sweet crude for January delivery gained 73 cents, or 1.3%, to $56.69 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 98 cents, or 1.6%, to $62.20 a barrel.
On Wednesday, the U.S. Energy Information Administration released weekly data showing a 5.6 million-barrel drop in crude inventories in the week ended Dec. 1. However, an unexpectedly large build in gasoline stockpiles, as well as record weekly output from shale companies, sparked a selloff in the energy market.
"This is just a technical rebound after yesterday's fall," said Eugen Weinberg, head of commodity research at Commerzbank AG.
Mr. Weinberg said he expects prices to continue to fall in coming months on rising U.S. oil output.
"The most important factor is not OPEC, it's shale production from the U.S.," he said.
Last week, the Organization of the Petroleum Exporting Countries agreed with other major producers, including Russia, to extend an agreement to curb crude oil output by nearly 2% through the end of next year. Prices received only a minor boost following the decision, as an extension had been largely priced in by the market.
OPEC and 10 producers outside the cartel first agreed a year ago to cap production at 1.8 million barrels a day below peak October 2016 levels, with the aim of both alleviating a global supply glut that has weighed on the market since 2014 and boosting prices.
Crude prices have risen more than 20% since September amid stronger compliance with the OPEC-led deal, along with growing global demand and renewed geopolitical risks in the Middle East.
"Last week's OPEC/non-OPEC meeting now looks like ancient history," said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd., in a note Thursday. "The meltdown that took place yesterday, however, provided us with a warning signal that it is not only OPEC and its 10 non-OPEC allies that play an important role in the formation of oil prices," he added.
Rising U.S. production has pressured oil prices this year, but Capital Economics analysts said output forecasts may be too optimistic.
"It seems doubtful that U.S. producers will be able to maintain current levels of growth beyond 2018 as constraints on output start to kick in which should prevent prices falling further," said Thomas Pugh, commodities economist at Capital Economics, in a Thursday note.
Gasoline futures gained 2.4% to $1.7000 a gallon and diesel futures advanced 1.9% to $1.8970 a gallon.
Stephanie Yang contributed to this article.
Write to Christopher Alessi at [email protected]