Oil prices have risen to near eight-week highs today, as a fall in US inventories bolstered expectations that the long-oversupplied market was moving toward balance.

Brent crude futures rose 40 cents to $50.60 a barrel by 1.13pm Irish time, after rallying more than 3% yesterday.

US West Texas Intermediate futures climbed 50 cents to $48.39 a barrel.

US crude stockpiles fell sharply last week as refineries boosted output, while petrol inventories increased and distillate stocks decreased, the industry group the American Petroleum Institute said on Tuesday.

Crude inventories fell 10.2m barrels in the week ending 21 July to 487m, more than the expected decrease of 2.6m barrels.

Data from the US Energy Information Administration could provide more support, with forecasts of a drop for a fourth week in a row.

Yesterday’s stock draw added to hopes the long-awaited oil market rebalancing was under way.

Saudi Arabia said on Monday it would limit oil exports to 6.6m barrels per day (bpd) in August, down nearly 1m bpd from a year earlier.

"The market has been tightening and the refinery margins are strong," said PetroMatrix managing director Olivier Jakob, saying the US stock draw offered a boost to prices.

"You add geopolitical risk premium for Venezuela, and you've got a strong market."

Venezuela, an OPEC member producing about 2m bpd of oil, faces deepening economic woes and protests.

President Nicolas Maduro's adversaries plan strikes to push him to abandon a weekend election.

The United States is considering financial sanctions to halt dollar payments for the Venezuelan oil.

Nigerian output slipped this week as leaks forced Shell to shut a pipeline exporting some 180,000 bpd of oil.

Nigeria, which has been exempted from OPEC-led production curbs, has agreed to cap or cut output when it stabilised at 1.8m bpd.

But analysts said the current oil price rally could encourage more production, particularly from the United States.

"Relieved bulls should be careful what they wish for. Any price rebound will only embolden US shale producers at a time when rumours have started to emerge that the US shale boom is slowing," PVM oil analyst Stephen Brennock said in a note.

Anadarko Petroleum Corp said on Monday it would cut its 2017 capital budget by $300m because of depressed oil prices, the first major US oil producer to do so, after posting a larger-than-expected quarterly loss.