Oil prices jumped more than 2 percent on Friday and were poised for a third week of gains as market sentiment turned more upbeat amid signs a persisting global supply glut may be easing.
Strong gasoline consumption in the United States, increasing signs of declining production around the world and oilfield outages have underpinned a return to investment in the sector, traders said.
“The current rally is driven by a market sentiment that is becoming more and more convinced that the worst is over and the global oil market rebalancing process is already in play,” said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
Brent crude futures LCOc1 jumped 2.1 percent to $45.45 per barrel as of 10:44 a.m. ET (1431 GMT). U.S. West Texas Intermediate CLc1 crude was up 2 percent at $44.07 a barrel.
Brent has surged about 6 percent so far this week and WTI 9.7 percent as both benchmarks headed for a third week of gains. Crude is up more than two-thirds since its 2016 lows between January and February.
Traders also pointed to strong crude imports to China in March as providing support to prices.
Still, some analysts warned that the oil market was still far from balancing supply and demand.
“While this recent rally has the potential to run further to the upside … we believe that it is not yet driven by a sustainable shift in fundamentals,” Goldman Sachs said in a note to clients.
The Wall Street bank maintained its view that a sustainable balancing of the market, driven by declines in U.S. shale oil production, would take place in the third quarter of 2016.
Another supportive factor has been producers taking advantage of higher prices by locking in output.