Oil prices have lifted more than one per cent after racking up steep losses yesterday.
Strong demand in the US helped push global benchmark Brent crude futures 1.11 per cent higher this morning to $48.32 per barrel. West Texas Intermediate (WTI), the US benchmark, traded 1.15 per cent higher at $45.65 per barrel.
Data yesterday from the American Petroleum Institute (API) showed US crude inventories fell by 5.8m barrels in the week to June 30 for a total of 503.7m.
Now investors await official data from the Energy Information Administration (EIA), out later today, to see whether it reflects the contraction.
"According to the consensus, the US crude inventories may have contracted by 2.4m barrels last week. Any disillusion could send the barrel of WTI crude below the $45 level and weigh on the energy stocks," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
Yesterday, prices dropped around four per cent due to rising exports from the Organisation of the Petroleum Exporting Countries (Opec), flying in the face of an Opec-led deal to cut production in order to prop up oil prices.
Opec members exported a total 25.92m barrels per day (bpd) in June, 450,000 bpd more than May and 1.9m bpd more than the previous year, according to research from Thomson Reuters.
"Against expectations, OECD total oil inventories are still above 3bn barrels and the recovery in Libyan and Nigerian supplies, coupled with a fast return of US shale, should prevent steep stock draws ahead," Bank of America Merrill Lynch said, according to Reuters.