Bloomberg News reports that OPEC and other oil producers taking part in output cuts have reached a consensus to extend the limits until the end of the year, oil ministers for two of the group's members said.
Opec is due to meet later this month in the hope of striking a second deal to secure a year of production cuts.
We bring down our forecasts to reflect the crude reality: stocks are still too high and usa supply is set to recover faster than we anticipated. "If U.S. output continues to level off, supplies continue to decline, and OPEC can agree to, at the very least, extend their quota policy into [the second half of the year], that will be supportive of prices establishing a near-term bottom".
The US Energy Information Administration said US crude inventories fell by 5.2 million barrels last week, which was more than the 1.8 million-barrel slide analysts predicted. Continuing the trend for April, however, the U.S. Labor Department reported first-time claims for unemployment for the week ending May 6 was down 2,000 from the previous week.
NEW YORK, May 11 (Reuters) - Oil prices rose more than 1 percent on Thursday, as large drawdowns in USA inventories and growing support for continued OPEC output cuts boosted confidence that a seemingly insurmountable glut might finally diminish.
International Brent crude futures were at $50.46 a barrel at 4.38am GMT on Thursday, up 24c, or 0.5%, from their last close.
Brent crude futures, the worldwide benchmark for oil prices, were at $50.33 per barrel at 0039 GMT on Thursday, up 11 cents, or 0.2 percent, from their last close.
Questions remain about the effectiveness of OPEC-led cuts.
Despite this, Falih said that markets had improved from last year's lows, when crude prices fell below $30 per barrel.
The 13-country OPEC is curbing its output by about 1.2 million bpd from January 1 for six months, the first reduction in eight years.
Oil resumed gains after industry data showed US crude stockpiles declined, trimming an inventory overhang.
Oil prices pared gains on Thursday after the release of the report to trade at less than $51 a barrel LCOc1 , below the $60 level that top OPEC producer Saudi Arabia would like to see.
US crude stocks fall 5.2 million barrels to lowest since February.
The initiative has largely been ineffective due to a consistent rise in United States production.
Iraq - OPEC's second-largest producer and a country that relies on oil revenues for almost 95 percent of its budget - committed to reduce daily production by 210,000 barrels to 4.351 million.
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