Oil rose more than three percent on Thursday, pushing Brent crude to a 2015 high above $63 per barrel.
The increase was due to evidence that U.S. production had dropped, balancing a market that had been in heavy oversupply for more than a year.
Oil prices collapsed in the six months to January, pushing Brent down more than 60 per cent to almost $45 a barrel.
But the market has gradually recovered this year as much lower prices have discouraged oil exploration and production, especially in the United States.
“People are realising that the U.S. production juggernaut is slowing, at least for now,” said Virendra Chauhan, oil analyst at London-based consultancy Energy Aspects.
“U.S. production is down for the second time in three weeks and refinery runs are spiking up, driving demand higher.”
Brent crude futures for June LCOc1 on Thursday hit $63.29 a barrel, the highest since December.
However, U.S. crude CLc1 was at $56.00, down 39 cents after hitting a 2015 high of $56.69 on Wednesday.
“This whole rally was primarily due to drops in U.S. crude production. We see the four-week average for crude production turning negative for the first time since July ’14,” Singapore-based energy brokerage Phillips Futures said in a note to clients.
But analysts say despite the oil price rally, the market remains oversupplied and this can reduce the price in the short term.
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