By Dan Strumpf 
 

Oil futures rallied in early Asia trading Thursday, shrugging off a rise in U.S. crude stockpiles and focusing on the prospect of tightening supply.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in June gained $0.86, or 2%, to $44.64 a barrel in the Globex electronic session. July Brent crude on London's ICE Futures exchange rose $0.70, or 1.6%, to $45.32 a barrel.

The rebound followed a quiet session in New York that registered a modest move in crude prices despite a government report showing another hefty increase in U.S. crude-oil stockpiles. The report underscored the persistence of supply glut in the world's biggest oil consumer.

Analysts attributed Thursday's rally in part to production outages in Canada, where wildfires in northern Alberta forced oil-sands companies to shut down or slow operations.

"Some big names have made announcements that they will be halting operations," said Nelson Wang, oil and gas analyst at brokerage CLSA in Hong Kong. He said the outages could force refiners in the U.S. who import Canadian oil to turn elsewhere for crude. "If [supplies] to the U.S. are reduced, that means the U.S. has to import more ... It does have an impact on global supply and demand."

Thursdays gains extends a months-long rally in oil prices, which are up by more than half from their lows earlier in the year. Expectations that major producers, from shale drillers in the U.S. to big exporters like Saudi Arabia, would curb production have pulled oil prices out of their early-year doldrums.

But coordinated supply cuts by members of the Organization of the Petroleum Exporting Countries have been elusive, and much of the world remains awash in oil. Last week, U.S. oil stockpiles rose 2.8 million barrels, more than double the rise forecast by analysts in a survey by The Wall Street Journal. Gasoline stockpiles also rose unexpectedly, sending combined oil and fuel stockpiles to a record high of 1.37 billion barrels, according to the U.S. Energy Information Administration.

In refined product markets, Nymex reformulated gasoline blendstock for June--the benchmark gasoline contract--rose 2.18 cents to $1.5084 a gallon, while June diesel traded at $1.3473, 1.91 cents higher.

ICE gasoil for May changed hands at $400.25 a metric ton, up $6.00 from Wednesday's settlement.

Write to Dan Strumpf at daniel.strumpf@wsj.com

(END) Dow Jones Newswires

May 04, 2016 23:34 ET (03:34 GMT)