Oil rose towards $62 a barrel on Thursday as indications of a coming recovery in demand offset a further jump in U.S. crude stockpiles which underlined currently ample supplies.
Crude benchmarks in the U.S. and Europe posted their largest percentage gains in nearly two weeks on Wednesday, supported by remarks from Saudi Arabia's oil minister, Ali al-Naimi, and a slightly stronger-than-expected Chinese manufacturing survey.
Brent crude LCOc1 rose 30 cents to $61.93 by 7.32 a.m. ET, after jumping more than 5 percent on Wednesday. U.S. crude CLc1 fell 57 cents to $50.42, following a more than 3 percent gain in the previous session.
"The comments yesterday, the change of tone from Saudi Arabia, is still an element," said Olivier Jakob, analyst at Petromatrix, of Brent's gain. "The market is still reacting to that."
Brent collapsed in 2014, falling from $115 reached in June on global oversupply. The decline deepened after the Organization of the Petroleum Exporting Countries chose to defend market share against rival supply sources, rather than cut its own output.
The price has rallied more than 35 percent from a near six-year low of $45.19 reached in January, supported by signs that lower prices are starting to reduce investment in U.S. and other non-OPEC supply.
A growing number of OPEC officials are making cautiously hopeful comments on the market outlook. This week, the Saudi minister said demand is growing while a Gulf OPEC delegate said demand would rise more strongly in the second half of 2015.
OPEC officials including Naimi had been making more bearish comments. The Saudi minister was quoted in December as saying OPEC would not cut output even if oil fell to $20.
"No more talk of $20 from al-Naimi," Jakob of Petromatrix said in a report. "Analysts calling for $20 a barrel oil will be more shy now."
Underlining currently ample supplies, the U.S. government's latest supply report said domestic crude inventories rose last week to 434.1 million barrels, hitting a seasonal record high for the seventh week.
Brimming U.S. crude supplies are increasing the discount at which U.S. crude is trading to Brent. The spread reached $11.81 on Thursday, the widest since January 2014.
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