Investing.com - Oil prices extended gains on Wednesday, pushing Brent back past $70 per barrel, after U.S. crude inventories fell unexpectedly last week, putting an end to the streak of two prior weekly builds.
The Energy Information Administration said in its regular weekly report that crude oil inventories decreased by 3.96 million barrels in the week to May 3. That was compared to forecasts for a stockpile build of 1.22 million barrels.
Crude prices extended gains following the data release. West Texas Intermediate oil was last up 1.3% at $62.19 a barrel by 11:07 AM ET (15:07 GMT), compared to $61.63 prior to the publication.
London-traded Brent crude futures gained 0.8% to $70.45 a barrel, compared to $69.99 ahead of the release.
“The headline crude draw is definitely bullish, given the expectations for a continued rise after last week's humongous 10-million-barrel build,” Investing.com senior commodity analyst Barani Krishnan said following the report.
He noted that the slightly-larger-than-expected draw in gasoline inventories will also “put a little more octane in the bulls’ tanks” despite the fact that the draw on distillates was smaller than forecast.
“That the gasoline draw came on the back of higher product output is also noteworthy as refinery output is still below the 90% norm for this time of year”, Krishnan highlighted.
Krishnan also noted that the drop in U.S. production from a record high of 12.3 million barrels to 12.2 million underpinned bullish sentiment.
Markets have been concerned that rising output from the U.S. - up around 1.5 million barrels from one year ago - would offset OPEC-led efforts to curb production and rebalance the market.