Crude oil futures rose for a fourth straight session on Thursday, gaining over $1 a barrel, as conviction strengthened that monetary stimulus measures from major central banks would stay in place for the time being.
U.S. GDP data on Wednesday that slashed the estimate of first-quarter economic growth and comments from Federal Reserve governors assured investors that the Fed is in no rush to scale back its massive bond-buying program.
"I think all the markets took a hit on the misinterpretation of Ben Bernanke's comments last week. Since then it seems like Fed governor after Fed governor has been walking those comments back, and that's helping a lot of asset classes including oil," said John Kilduff, partner at Again Capital LLC in New York.
Brent crude for August delivery tested its 50-day moving average, rising as high as $103.34 before ending the day up $1.16 at $102.82 a barrel. Brent is on track for its longest stretch of daily gains since mid-May.
U.S. crude rose for a fourth straight session, breaking through its 14-day moving average to end up $1.55 at $97.05 a barrel.
U.S. crude has outperformed Brent in three of the last four sessions, narrowing Brent's premium to crude to $5.77 at Thursday's close, from as wide as $7.40 on June 24.
European Central Bank President Mario Draghi also offered the markets reassurance, highlighting on Wednesday downside risks to euro zone growth and saying monetary policy would stay accommodative.
Turmoil and outages in oil-producing regions also lent support to Brent, the international benchmark contract.
Five people were killed and nearly 100 wounded in clashes between rival armed militias in Libya's capital on Wednesday, Health Minister Nurideen Doghman said.
Output at Britain's Buzzard oilfield in the North Sea is expected to stay at reduced levels of around 170,000 barrels per day (bpd) for around five days, an industry source said on Thursday.
Traders also cited tightness in the Urals market, which was spilling over into Brent and U.S. crude.
Large stockpiles in the United States of crude oil and gasoline suggest a limit on how far prices can rise.
U.S. gasoline stocks surged 3.65 million barrels in the week ended June 21, in the summer driving season, data from the U.S. Energy Information Administration showed on Wednesday. Analysts had expected a more modest build of 900,000 barrels.
Brent is down more than 6 percent for the quarter so far, on track for a third straight quarterly loss after falling last week on concerns about an economic slowdown in China and comments by Fed Chairman Bernanke that signalled the bank might ease off bond buying.
This would amount to the longest stretch of quarterly losses since late 1997 into 1998.
Brent crude oil prices are forecast to decline further this year and next, pressured by a potential slowdown in Chinese oil demand growth and swelling supplies, a Reuters poll showed on Thursday.
Investors, meanwhile, turned their attention to U.S. non-farm payrolls data due next week to gain further clarity on the economy and prospects for monetary policy.
"This is the more definitive number for the Federal Reserve, because we know that they are comfortable with inflation levels, but unemployment is still not where they want it to be," said Lee Chen Hoay, investment analyst at Phillip Futures in Singapore.
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