Investing.com - West Texas Intermediate oil extended gains in North American trade on Wednesday after weekly data showed that oil supplies in the U.S. registered a larger-than-expected draw.
Crude oil for October delivery on the New York Mercantile Exchange rose 91 cents, or 1.33%, to trade at $69.44 a barrel by 10:33 AM ET (14:33 GMT), compared to $69.06 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 2.566 million barrels in the week ended August 24. Market analysts' had expected a crude-stock draw of 0.686 million barrels, while the American Petroleum Institute late Tuesday reported a supply increase of 0.038 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 0.058 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 405.8 million barrels as of last week, according to a press release, which the EIA indicated was “at the five year average for this time of year”.
The report also showed that gasoline inventories decreased by 1.554 million barrels, compared to expectations for a build of 0.370 million barrels, while distillate stockpiles dropped 0.837 million barrels, compared to forecasts for a gain of 1.592 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery traded up 61 cents, or 0.80%, to $76.90 by 10:36 AM ET (15:36 GMT), compared to $76.56 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $7.72 a barrel by 10:38 AM ET (15:38 GMT), compared to a gap of $7.76 by close of trade on Tuesday.
Apart from stockpiles, market participants have been keeping a close eye on supply levels and gains seen earlier on Wednesday were bolstered by news of Iranian output.
It was reported that Iran’s crude oil and condensate exports were set to drop below 70 million barrels for the first time since April 2017, according to Thomson Reuters Eikon trade flow data.
The report came as markets wait for a second round of U.S. sanctions on Tehran to kick in on Nov. 4.
As the sanction start date nears, traders expect Iranian supplies to further dwindle after many buyers have already bowed to pressure and decreased their purchases despite deep discounts.
A report on Monday suggested further future output reduction as OPEC had yet to bring compliance with production curbs down to the 100% target.
Elsewhere, Venezuelan state-run oil company PDVSA said on Tuesday that it agreed a $430 million investment to increase production by 640,000 bpd at 14 oil fields, although some analysts remain suspicious whether this investment would go through, according to Reuters, which cited the country's political and economic instability.