Oil rose about 2.5% on Wednesday after government data showed a surprise draw in U.S. crude stocks and as the prospect of deeper output cuts by OPEC and its allies offered support, APA reports quoting Reuters.
U.S. crude stocks fell 1.7 million barrels last week as refineries hiked crude runs by 429,000 barrels per day (bpd) and oil imports fell, the Energy Information Administration said. Analysts had expected an increase of 2.2 million barrels.
Brent crude futures settled at $61.17 a barrel, up $1.47, or 2.5%. West Texas Intermediate (WTI) crude futures rose $1.49, or 2.7%, to end at $55.97 a barrel.
Oil prices had fallen earlier in the session after data on Tuesday from industry group the American Petroleum Institute showed U.S. crude stocks rising more than analysts’ expectations, by 4.5 million barrels to 437 million barrels.
The EIA’s report “has put some buyers in the market, but it will be interesting to see if it lasts. While this will distract from demand destruction, the market will eventually come back to it,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
The draw in U.S. oil stocks appeared to have been caused by temporary market factors including higher refinery runs, rather than a fundamental firming of oil demand, and investors are still concerned about the global economy following reports of slowing growth in China and Europe, McGillian added.