Investing.com - U.S. oil prices moved higher on Friday, as a surprise drop in U.S. stockpiles continued to support, but gains were expected to remain limited as concerns over the effectiveness of OPEC’s output cuts persisted.
U.S. crude futures for April delivery were up 0.49% at $49.08 a barrel.
On the ICE Futures Exchange in London, the May Brent contract gained 0.56% to trade at $52.02 a barrel.
Crude prices rallied after the U.S. Energy Information Administration said in its weekly report on Wednesday that crude oil inventories declined by a surprising 237,000 barrels last week to 528.2 million barrels. It was the first drawdown in stockpiles since early January.
The commodity also benefited from a weaker dollar after the Federal Reserve’s policy statement on Wednesday was seen as less hawkish than expected by sticking to projections of three total rate hikes in 2017 and not four as some traders had hoped for.
However, traders were expected to remain cautious after a report earlier in the week showed that Saudi Arabia raised output back above 10 million barrels a day in February, sparking fresh concerns over a global supply glut.
Separately, Iraq said its March oil exports averaged 3.25 million barrels-per-day in the first 14 days of the month, slightly lower than February's 3.27 million bpd. However, the decline was not as much as expected, raising doubts over the country's compliance with the OPEC supply cut deal.
January 1 marked the official start of the deal agreed by OPEC and non-OPEC member countries such as Russia in November last year to reduce output by almost 1.8 million barrels per day to 32.5 million for the next six months, but so far the move has had little impact on inventory levels.
Kuwait is scheduled to host a ministerial meeting on March 26 comprising both OPEC and non-OPEC members to review compliance with the output agreement and to discuss whether cuts would be extended beyond June.