Oil futures rose nearly three percent in American trade, while the dollar index barely inched higher, following earlier data from the US, the world's largest oil producer and exporter, and after reports that Saudi Arabia plans to cut exports to American refineries to the lowest in three decades next month.
As of 08:33 GMT, US crude futures due in January rose 2.76% to $52.56 a barrel, while Brent February futures spiked 2.58% to $61.70 a barrel, as the dollar index inched up 0.03% to 97.07.
US Labor Data
Earlier US data showed unemployment claims fell 27 thousand in the week ending December 8 to 206 thousand, far below estimates of 226K, while continuing claims for the week ending December 1 rose 25 thousand to 1.661 million.
Import prices fell 1.6%, compared to a 0.5% increase in October, and missing estimates of a 1% drop.
US Inventories
The Energy Information Administration reported a deficit of 1.2 million barrels in US crude stocks in the week ending December 7, compared to a 7.3 million drop in the previous reading, while analysts expected a 3M decline, with total stocks now down to 442 million barrels, while still 7% above five-year averages.
Gasoline stocks rose 2.1 million barrels, marking them 3% above averages, while distillate stocks fell 1.5 million barrels, making them 8% below averages.
Otherwise, reports circulated of a potential cut in Saudi oil exports to the US to 582 thousand bpd, down 40% from three-month averages, and compared to 860 thousand bpd in 2018 on average.
Otherwise, OPEC cut forecasts for demand on its oil in its monthly report by 100 thousand bpd to 31.44 million bpd for next year, as competitors pump larger amounts while economic growth slows down.
On a similar note, Saudi Arabia said it plans to cut output to 10.2 million bpd in January, a 900 thousand bpd cut from November, while Russia plans a cut between 50 and 60 thousand bpd next month.
OPEC announced an agreement to cut total output by 1.2 million bpd in coordination with allies such as Russia, with the cuts to start in January and with Iran, Libya, and Venezuela, gaining exceptions from the required cuts.
Russia's current output stands at about 11.37 million bpd, while recent reports indicate that Saudi Arabia's production increased by 0.5 million bpd last month to up to 11.3 million bpd, as US output steadied at record highs at 11.7 million bpd.
Libyan production is expected to tumble by 315 thousand bpd due to the cut-off in supplies from the Sharara oil field after armed militias took over it, with another 73 thousand bpd down from another field.