Oil rose for a second day on Thursday as a weaker dollar and a surprisingly large drop in U.S. crude inventories emboldened investors ahead of next week's meeting between OPEC members and Russia to discuss supply.
Brent crude futures rose 38 cents to $47.21 a barrel in early morning trading, or a 3.2 percent gain so far this week, while U.S oil futures were up 41 cents at $45.75 a barrel.
The U.S. Energy Information Administration on Wednesday reported a 6.2 million barrel drop in crude oil inventories last week, the second biggest drop in a year.
The drawdown, along with a more benign outlook for U.S. monetary policy, overshadowed news Russian oil output hit a new record above 11 million barrels per day this week and that Libya had exported its first oil cargo since at least 2014 from the port of Ras Lanuf.
"In a way, this strength is justified," PVM Oil Associates strategist Tamas Varga said.
"It is also justified because of the upcoming informal OPEC meeting and it's only logical that a few days before that meeting, shorts will start covering and yesterday's stock figures provided the perfect excuse," he said.
A weaker dollar makes energy imports cheaper for oil-reliant nations while low U.S. rates mean credit will remain easier to come by.
Next week, the world's largest producers will gather in Algiers to discuss ways to stabilize the oil market, including a potential freeze in output, which is already at, or near, record highs in countries such as Russia and Saudi Arabia.