By Alison Sider and Christopher Alessi 

Oil prices rose Friday morning, continuing to climb back from losses earlier in February, following a surprise drop in U.S. crude stockpiles reported Thursday.

U.S. crude futures recently traded up 52 cents, or 0.83%, to $63.29 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 51 cents, or 0.77%, to $66.90 a barrel on ICE Futures Europe.

Friday's move builds on gains Thursday after the U.S. Energy Information Administration reported the amount of crude oil in storage in the U.S. fell by 1.6 million barrels last week. The unexpected decline followed weeks of crude storage builds that had added to pressure on the price of crude.

The EIA also reported Thursday that weekly production edged down slightly from a record high. In addition, supplies have been draining rapidly from the delivery hub in Cushing, Okla. Stockpiles of oil there have fallen to their lowest level in more than three years, also helping to lift prices.

"We went through a correction. Now the market seems to be turning back to the idea of a production cut and increased demand," said Gene McGillian, research manager at Tradition Energy.

Oil prices surged at the beginning of the year, fueled by strong demand and continued restraint by the Organization of the Petroleum Exporting Countries. But oil prices were pulled lower this month as the stock market tumbled and data showed U.S. production has crested above 10 million barrels a day.

While some of those losses have been erased, Brent is still trading well below the three-year highs of more than $70 a barrel reached last month.

But prices recovered somewhat over the past week as OPEC and its partners signaled that they would continue to hold back crude production through the end of this year.

"The early-year roller-coaster across the energy complex has given way to a newfound sense of calm," Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd. wrote in a client note, adding that oil prices are in a "new pricing norm."

"It is now clear that Brent's scramble past $70/bbl last month left it vulnerable to profit-taking. Meanwhile, we also learnt how OPEC will not tolerate a sub-$60 oil environment after recently launching a salvo of bullish comments."

Gasoline futures rose 2.01 cents, or 1.14%, to $1.7858 a gallon. Diesel futures rose 0.39% to $1.9603 a gallon.

Write to Alison Sider at alison.sider@wsj.com and Christopher Alessi at christopher.alessi@wsj.com

(END) Dow Jones Newswires

February 23, 2018 11:55 ET (16:55 GMT)

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