Brent crude rose to above $50 a barrel for the first time in almost seven months

Brent crude rose to above $50 a barrel for the first time in almost seven months in early Asia trade Thursday.

July Brent oil rose $0.29 to $50.03 a barrel on London’s ICE Futures exchange, its highest point since November.

The commodity was boosted by data released by the U.S. Energy Information Administration on Wednesday which revealed that U.S. crude stockpiles fell 4.2 million barrels last week – a much sharper drop in crude stockpiles than what analysts had forecast.

oil well

Growing demand from China and India has also helped push oil prices up to levels almost 80% higher than where they were in February – when the dropped to a-year low.

US crude on the New York Mercantile Exchange for delivery in July rose by 23 cents to $49.79 a barrel in the Globex electronic session, up to its strongest level since Oct. 12.

“Certainly ($50) is a psychological barrier. There is a momentum, people will try and push it up over that,” Ric Spooner, chief market analyst at Sydney’s CMC Markets, told Reuters.

“(From a) practical point of view will there or will there not be a sustainable increase above $50? At the $50-$55 range there has got to be a good chance of seeing the peak.”

Vyanne Lai, energy analyst at National Australia Bank, was quoted by the WSJ as saying: “The fundamentals of the U.S. are changing, and the declining production rate in the U.S. is a welcoming sign that adds to the belief the glut is dwindling,”

However, some analysts believe that oil’s recent rise is not going to last given that there is still not enough demand to meet excess supply, not to mention the fact that the Organization of the Petroleum Exporting Countries (OPEC) is set to ramp up production.