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Crude extends gains for sixth-straight day despite rise in inventories

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Investing.com - Crude futures settled higher on Wednesday, as a bigger than expected drop in gasoline inventories offset an unexpected build in crude output, easing investor concerns about a slowdown in demand for refined products.

On the New York Mercantile Exchange crude futures for August delivery rose 1.1% to settle at $44.74 a barrel, while on London's Intercontinental Exchange, Brent added 1.34% to trade at $47.55 a barrel.

Investors mulled over a mixed weekly inventory report from the Energy Information Administration, showing a surprise build in crude stockpiles while gasoline inventories fell by more than expected.

Inventories of U.S. crude unexpectedly rose by roughly 118,000 barrels in the week ended June 23, below expectations of draw of about 2.5m barrels.

Gasoline inventories, one of the products that crude is refined into, fell by 894,000 barrels against expectations of a draw of 583,000 barrels while distillate stockpiles declined by 223,000 barrels, compared to expectations of a rise of 453,000 barrels.

The bigger-than-expected draw in gasoline stockpiles eased investor concerns about a slowdown in demand for refined products, after data in June showed stockpiles of gasoline rose back above 2016 levels and well above their five-year average.

Crude prices extended gains for a six-straight day, after falling into bear-market territory last week amid fears that an uptick in output by Nigeria and Libya were undermining Opec and its allies' efforts to curb oversupply.

Earlier in June, Libya's 270,000-bpd Sharara oilfield reopened while Royal Dutch Shell lifted force majeure on exports of Nigeria's Forcados crude oil, bringing all of the West African country's oil exports fully online for the first time in 16 months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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