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Oil extends gains after data shows drop in U.S. crude, gas stockpiles

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Investing.com - Oil prices extended gains in North American trade on Wednesday, hitting the highest levels in around eight weeks, after data from the U.S. Energy Information Administration showed a large drop in domestic crude and gasoline supplies.

The U.S. West Texas Intermediate crude September contract was at $48.39 a barrel by 10:35AM ET (1435GMT), up 50 cents, or around 1.1%. Prices were at around $48.12 prior to the release of the inventory data

Elsewhere, Brent oil for September delivery on the ICE Futures Exchange in London tacked on 45 cents to $50.65 a barrel.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 7.2 million barrels in the week ended July 21.

Market analysts' expected a crude-stock decline of around 2.6 million barrels, while the American Petroleum Institute late Tuesday reported a supply-drop of 10.2 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by around 1.7 million barrels last week, the EIA said.

Total U.S. crude oil inventories stood at 483.4 million barrels as of last week, which the EIA considered to be at the upper half of the average range for this time of year.

The report also showed that gasoline inventories decreased by 1.0 million barrels, compared to expectations for a much more modest decline of 0.6 million barrels.

For distillate inventories including diesel, the EIA reported a fall of 2.9 million barrels.

Oil prices scored their biggest one-day rally of 2017 on Tuesday as fresh pledges from Saudi Arabia and Nigeria at the start of the week to respectively pull back on exports and output boosted sentiment.

Elsewhere on Nymex, gasoline futures for August was down half a cent to $1.597 a gallon, while August heating oil added 1.4 cents to $1.582 a gallon.

Natural gas futures for September delivery slumped 2.6 cents to $2.905 per million British thermal units.

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