U.S. oil prices settled above $50 a barrel on Thursday after nearly three weeks of trading below that level, which analysts consider a psychological threshold for the oil industry.
Traders reacted to media reports that Kuwaiti officials signaled OPEC is considering continuing oil-production beyond this summer, when agreements between OPEC countries and non-OPEC counterparts expires.
On Wednesday, U.S. commercial oil inventories had increased less than expected in the Energy Department’s weekly report, and some investors believe it could be a sign the oil supply glut is easing.
“The biggest overhand is still in the U.S. By the end of April, we should start to see U.S. crude stocks leveling out and starting to decline because refinery runs will increase,” said Michael Wittner, an oil market analyst at French bank Société Générale. “Refinery maintenance season will come to an end and imports are starting to go down.”
The U.S. crude benchmark rose 84 cents to settle at $50.35 a barrel on the New York Mercantile Exchange. About a week ago, the price had dropped to a settlement of $47.34 a barrel.