Crude stocks at the Cushing storage hub in Oklahoma fell by 1.3 million barrels to their lowest level since October 2014, helped to pushed Brent futures to close $1 a barrel higher on Thursday, data from the Energy Information Administration (EIA) showed.
Prices had tumbled to a six-week.
Under constant pressure from US President Donald J. Trump to cool prices, Opec and its allies are fulfilling a pledge made in June to increase output to ease concerns over potential supply disruptions in countries such as Iran and Venezuela.
Hedge funds and other money managers cut their bullish USA crude bets in the latest week, as oil prices were range-bound, pinned between concerns about tight supply due to sanctions and fears that trade disputes could curb demand.
Traders said prices rallied early when industry information provider Genscape reported that crude inventories at the Cushing, Oklahoma, delivery hub for US crude, dropped 1.1 million barrels since Friday, July 27.
Futures in NY were little changed, following a 3.5-percent slide in the past two sessions.
According to the Weekly Petroleum Status Report, U.S. commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve (SPR), increased by 3.8 million barrels last week.
There were some bullish elements in the report, notably gasoline stocks declining by 2.5 million barrels. West Texas Intermediate, the US benchmark for the price of oil, was down 0.1 percent to $68.89 per barrel.
Crude oil costs experienced their worst monthly decline in over two years in July as a multi-year high in barrel prices broke away amidst plans by OPEC and Russian Federation to boost production limits.
Oil prices were steady on Friday, supported by traders placing new hedges in the futures market in anticipation of a decline in US crude inventories, but held back from advancing by the prospect of rising global supplies.
ANZ bank said on Friday in a note the drop in Cushing inventories were a driver for rising crude oil prices "amid signs that last week's (overall) build in inventories won't last very long". Total volume traded was about 23 percent below the 100-day average.
Since Russia joined the Organization of Petroleum Exporting Countries in reducing output, crude prices have risen to three-year highs as the glutted market rebalanced. That's equivalent to about 11.21 million barrels a day, a jump of 140,000 from a month earlier, according to Bloomberg calculations based on the ministry's data.