Oil prices rose sharply as U.S. crude oil inventories fell for a fourth consecutive week.
The Energy Information Administration said crude oil inventories plummeted by 9.50 million barrels in the week to July 5. That compared to forecasts for a stockpile draw of 3.08 million barrels, after a decline of 1.09 million barrels in the previous week.
U.S. crude prices rose 3.0% to $59.55 a barrel by 11:01 AM ET (15:01 GMT), compared with $59.45 prior to the publication.
London-traded Brent crude futures traded up 3.0% to $66.09 a barrel, compared to $65.86 ahead of the release.
“Another huge weekly draw has compensated for last week’s disappointing numbers in crude, justifying today’s 3% price rally,” said Barani Krishnan, Investing.com’s senior commodity analyst.
Oil was already on a tear before today’s release. The American Petroleum Institute’s late Tuesday report showed an 8.1 million barrel fall in inventories last week.
Also supporting earlier gains was the fact that major producers have begun shutting production in the Gulf of Mexico as a tropical disturbance may become a storm later on Wednesday or Thursday.
“All in, it’s a pleasantly bullish report for the longs, though the other unknowns in supply-demand – i.e. China and the trade war – could rear their head again after this to offset some of the positive impact from this data,” Krishnan said.
The EIA report showed that U.S. output once again ticked up to 12.3 million barrels per day, near record highs.