Oil prices climb as U.S. stock drawdown eases supply glut fears

* U.S. crude stocks fall by 5 mln bbls last week -EIA
* OPEC chief says market responding well to record supply
cut
* U.S. Fed vows to do what it takes to boost U.S. economy
-minutes

By Yuka Obayashi
TOKYO, May 21 (Reuters) - Oil prices edged higher on
Thursday after data showed U.S. crude inventories fell again,
easing concern about a supply glut, though lingering fears over
the global economic fallout from the COVID-19 pandemic capped
gains.
Brent crude futures for July delivery LCoc1 were trading
up 17 cents, or 0.5%, at $35.92 per barrel at 0024 GMT. U.S.
West Texas Intermediate (WTI) crude futures for July CLc1 were
up 4 cents, or 0.1%, at $33.53 a barrel.
U.S. crude inventories USOILC=ECI fell by 5 million
barrels last week, against expectations in a Reuters poll for a
1.2 million-barrel rise, Energy Information Administration (EIA)
data showed, while stocks at the Cushing, Oklahoma, delivery hub
dropped by 5.6 million barrels. EIA/S
"While signs that WTI storage pressures are abating is
positive for prices, the latest report shows that the fall in
stocks owes more to supply factors than growing product demand,"
Capital Economics said in a note issued on Wednesday.
Prices have been boosted lately by shipping data showing the
Organization of the Petroleum Exporting Countries, Russia and
other allies, a group known as OPEC+, are complying with their
pledge to cut 9.7 million barrels per day (bpd). OPEC itself is encouraged by the rally in prices and strong
adherence to output cut pledges, its secretary general said,
although sources say the group has not ruled out further steps
to support the market. "We expect this to be the story for some time yet as OPEC+
cuts help to put a floor under prices in the second half of this
year," Capital Economics said.
Still, lingering concerns about the economic fallout from
the pandemic, especially in the United States, the world's
biggest oil consumer, have applied downward pressure on prices.
Federal Reserve policymakers repeated a vow to take all
steps necessary to shore up the U.S. economy, minutes from the
U.S. central bank's April 28-29 policy meeting released on
Wednesday showed.