Oil extends gains after steep drop in U.S. crude inventories

Pump jacks operate at sunset in Midland, Texas, U.S., February 11, 2019. (Reuters)

SULAIMANI (ESTA) — Oil prices extended gains on Wednesday after industry data indicated U.S. crude stocks fell much more than expected last week.

Brent crude futures rose 55 cents to $69.43 a barrel at 0656 GMT, after touching a more than seven-week high of $69.78 earlier in the session.

U.S. West Texas Intermediate (WTI) crude futures were up 49 cents at $66.18 per barrel, after climbing to $66.58, a level not seen since March 8.

Both benchmark contracts rose nearly 2% on Tuesday ahead of data from the American Petroleum Institute (API) industry group, according to Reuters.

API figures showed crude stocks fell by 7.7 million barrels in the week ended April 30, according to two market sources.

“Crude oil prices appear to be supported by a large draw in crude and gasoline inventories, according to API figures,” Reuters quoted Margaret Yang, a strategist at Singapore-based DailyFX, as saying.

“The energy demand outlook is brightened by eased lockdowns measures in parts of the U.S. and UK, which helped to offset concerns over lower demand from India and Japan. The upcoming summer driving season may further boost fuel demand and support oil prices.”

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