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REUTERS

Oil futures rose on Thursday after slumping to a three-week low in the previous session, buoyed by a report from an industry body that showed US crude stockpiles had fallen more than expected.

Data from the American Petroleum Institute (API) showed crude inventories were down by 8.7 million barrels at 513.2 million in the week to 26 May. That compared with analyst expectations for a decrease of 2.5 million barrels.

Brent crude futures for July were up 40 cents at $51.16 a barrel early on Thursday.

On Wednesday, they fell $1.53, or 3%, to settle at $50.31 a barrel on their last day as the front-month contract. It was Brent's lowest close since 10 May and the contract dropped 2.7% last month, the third monthly decline.

US West Texas Intermediate crude futures were up 38 cents at $48.71 a barrel.

They dropped $1.34, or 2.7%, in the previous session to settle at $48.32 per barrel, the lowest close since 12 May. The US benchmark also fell for a third month in May, declining 2%.

The US Energy Information Administration (EIA) report on stockpiles is due later on Thursday, delayed by a day because of the Memorial Day holiday on Monday.

Further gains may be limited for the two major oil benchmarks as bearish news keeps coming from Opec and other producers including Russia that are locked in a battle against rising shale production in their efforts to boost prices.

Oil futures have given up all the gains posted in advance of last week's agreement between Opec and non-Opec producers to extend a production cut for a further nine months.

"Doubts remain as to the likelihood that inventories will fall as Opec continues to constrain output," ANZ said in a research note.

Output from Opec rose in May, the first monthly increase this year, a Reuters survey found.

Higher supply from Nigeria and Libya, Opec members that are exempt from the production-cutting deal, offset improved compliance by others.