At 1625 IST, the July crude contract on MCX was 1% higher at 4,157 rupees a bbl and the August delivery contract on NYMEX was 0.5% higher at $60.73 a bbl.
Oil prices rose 4.5% a barrel on Wednesday to their highest level in more than a month after USA crude inventories shrank and as major producers cut almost a third of offshore Gulf of Mexico production ahead of an expected storm, Trend reports citing Reuters.
Tensions have been high in the Middle East after attacks on tankers and the downing of a USA drone by Iran last month, following President Donald Trump's unilateral withdrawal from a multi-party agreement with Tehran to end its nuclear programme.
"Brent crude oil. extended its gains as storms in the Gulf of Mexico halted production of oil and U.S. oil inventories continued to recede more than expected", ANZ Bank said in a note. US crude stocks fell by 9.5 million barrels in the week to July 5, the Energy Information Administration (EIA) said, more than the 3.1-million-barrel draw analysts had expected. This is also propping up prices.
On Thursday, OPEC said the world would need 29.27 million bpd of crude from its members in 2020, down 1.34 million from this year.
Phillips 66 said it expected to complete the closing of its 253,600-barrel-per-day Alliance, Louisiana, refinery because of the storm threat, Reuters reported.
"This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand started to falter", the IEA said. This stockpile draw comes as the OPEC plus group agree to extend the current output cut.
The market was also bolstered by the news that a tropical cyclone is likely later this week in the Gulf of Mexico, raising concerns over potential disruptions to oil and natural gas production in the region.
France, Germany, Britain and the EU High Representative on Tuesday expressed "deep concerns" over Iran's fresh move to raise the concentration of its enriched uranium beyond agreed limits, calling for an urgent meeting of a joint commission on the issue.
From a technical perspective, holding above their respective 200-day Moving Averages will indicate the presence of buyers.