Oil prices rise after bigger-than-expected fall in U.S. inventories

Oil prices climbed on Thursday after an industry report showed a decline in U.S. crude inventories that exceeded analyst expectations. U.S. West Texas Intermediate (WTI) crude futures were up 19 cents, or 0.3%, at $59 a barrel by 0023 GMT. They closed down 0.6% on Wednesday after hitting their lowest since March 12 at $56.88.

Brent crude futures, the international benchmark for oil prices, were up 3 cents at $69.48 a barrel. They fell nearly 1% in the previous session after recouping losses that saw them drop as far as $68.08. U.S. crude inventories declined by 5.3 million barrels in the week to May 24 to 474.4 million, data from industry group the American Petroleum Institute showed. 

That was a much larger drop than the 900,000-barrel fall expected by analysts polled by Reuters.  Weekly U.S. oil inventory data has been delayed by Monday`s Memorial Day holiday, with the government`s report due on Thursday at 11 a.m. EDT (1500 GMT). 

Crude prices also continued to be supported by falling supplies from Iran and output cuts by OPEC and other major oil producers. Iranian May crude exports fell to less than half of April levels at around 400,000 barrels per day (bpd), tanker data showed and two industry sources said, after the United States tightened sanctions on Tehran`s main source of income.

Many expect supply cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, to be extended in a meeting next month. Crude prices have risen by about 30 percent since the start of the year when OPEC+, which includes Russia, cut production to reduce a global glut.