© Jim West / Global Look Press
Brent crude futures jumped to almost $53 per barrel before retreating to $52.53. US benchmark West Texas Intermediate rose above $50 per barrel before dropping to $49.74.
"US inventories are showing massive drawdowns, Saudi Arabia seems intent on playing its role as the world's swing producer (and) impending sanctions on Venezuela by the US will almost certainly be oil price-supportive," said Jeffrey Halley, an analyst at futures brokerage OANDA, as quoted by Reuters.
US stockpiles have declined 10 percent from their March peaks to 483.4 million barrels.
"Strong increases in the price of oil... (were) fueled in large part by the substantial drawdowns in U.S. inventories over the past several weeks," said William O'Loughlin, an analyst at Rivkin Securities.
US oil producers added only ten rigs in July, the fewest since May 2016.
However, oil producers in America have been flexible to declining prices, and the rally may not last long, analysts warn.
"American producers have shown how elastic they can be," said Ric Spooner, the chief analyst at CMC Markets.
In China, supplies remain stably high. China's June crude stockpiles rose to the highest level since September 2016, marking the third month of gains, Xinhua News Agency reported.
Representatives of some OPEC and non-OPEC nations are meeting in the United Arab Emirates capital Abu Dhabi on August 7-8 to discuss why some members are not fully complying with the agreed production cuts.
Crude prices have been on a downward trend since mid-2014, having halved over the period due to a supply overhang in the market.
Isn’t it about time for you to have an oil rig fire or two, or maybe blow up another one of your refineries so you can really rape our wallets. Or why don't you just dump crude oil in the Atlantic like ya'll did back in the 70's?
How about a pat on your back? “Oil producers in America have been flexible to declining prices and have shown how elastic they can be”.
I guess we’ll learn next week just how greedy you’ll be.., in the meantime I’m preparing to burn wood, coal, electric, or go solar because I’ve just had enough!!