Oil prices jumped almost 1.5 percent on Wednesday, extending gains after a U.S. government report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise drop in distillate inventories.
The Energy Information Administration (EIA) said U.S. crude stocks fell 4.7 million barrels during the week ended July 14. , exceeding estimates for a 3.2 million draw in crude stocks in a Reuters poll. A day earlier, preliminary data from the American Petroleum Institute showed a 1.6 million barrel increase.
Brent futures for September delivery were up 69 cents, or 1.4 percent, at $49.53 a barrel by 11:09 a.m. EDT (1509 GMT). U.S. West Texas Intermediate crude for August rose 64 cents, or 1.4 percent, to $47.04 on its second to last day as the U.S. front month.
Before the EIA report, U.S. and Brent futures were up about 0.6 percent, supported by strong demand for gasoline.
“The report was more good news for the oil industry as inventories declined across the board for crude and products by over 10 million barrels,” Andrew Lipow, president of Lipow Oil Associates in Houston said.
“Gasoline inventories are now nearly 5 percent lower than this time last year. That is a reflection of good consumer demand,” Lipow said.
EIA said distillate stocks decreased 2.1 million barrels and gasoline stocks declined 4.4 million barrels. Analysts polled by Reuters had forecast a 1.2 million barrel build in distillates and a 0.7 million barrel draw in gasoline.
U.S. gasoline and distillates futures were both up almost 2 percent after the data, boosting the products crack spread CL321-1=R, a measure of refinery margins, to its highest since November 2016.