Oil extends pre-Christmas rally in Asia after US report

Oil prices extended their recent rally in Asia on Thursday as a drop in US crude supplies cheered global financial markets ahead of the long Christmas weekend.

The main global contracts for the commodity surged more than 3.5 percent on Wednesday after the US Department of Energy reported inventories unexpectedly fell in the week ending December 18 while imports sank about 13 percent week on week.

The news stoked hopes that a plunge in prices, which has seen the Brent contract hit 11-year lows, may be coming to an end. At 0530 GMT on Thursday, US benchmark West Texas Intermediate was up 22 cents, or 0.59 percent, at $37.72.

Brent was 21 cents, or 0.56 percent, higher at $37.57. WTI on Tuesday broke past Brent for the first time since January, after US lawmakers last week lifted a 40-year ban on crude exports, leading to hopes of a fall in supplies at home.

"Concerns over the global supply glut have been slightly eased by last week's decline in stockpiles," Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul, told Bloomberg News.

"Seasonally stockpiles should be easing, but the issue here is how fast. At this price level, the number of rigs should continue to fall."