The oil price is again edging up towards the $120 a barrel mark.
This comes after US crude inventories dipped much more than expected amid high demand for fuel, shrugging off OPEC+'s agreement yesterday to boost crude output to compensate for a drop in Russian production.
Reuters says the price is also being supported by the European Union's sixth package of sanctions against Russia, which will include an immediate ban on new insurance contracts for ships carrying Russian oil and a six-month phase-out on existing contracts.
Brent futures were marginally ahead at $117.69 a barrel earlier today.
US crude oil and fuel stockpiles fell last week, as demand continued to outstrip supply - with commercial crude inventories drawing down even as more strategic reserves entered the market.
Oil prices dipped earlier on Thursday as Saudi Arabia and other OPEC+ states agreed to bring forward oil production rises to offset Russian output losses to ease surging oil prices and inflation and smooth the way for an ice-breaking visit to Riyadh by US President Joe Biden.
The Organisation of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, agreed to raise output about 650,000 barrels per day in the next two months rather than the current 432,000 bpd.
Andrew Lipow, president of Lipow Oil Associates in Houston, told Reuters: "While OPEC+ agreed to increase their production quota by a bit more than the market expected, in reality it does very little to add additional supplies as OPEC+ was already falling short of its existing quotas by over 2million barrels per day."
Oil has mostly marched higher for several weeks as Russian exports have been squeezed by US and EU sanctions against Moscow over its invasion of Ukraine.
The market has also seen support from China's gradual emergence from strict Covid-19 lockdowns.
Russian production has fallen by around 1million bpd following sanctions. The Kremlin says it can re-route oil exports to minimise losses from EU sanctions, but analysts remain sceptical.
"The extent to which this will prove achievable is questionable, however. Russian oil production is therefore likely to fall again in the coming months," said Commerzbank analyst Carsten Fritsch, who also questioned OPEC+'s ability to add considerably more oil to the market.
The London Stock Exchange is closed today