Oil prices extended gains in early trading in Asia on Wednesday after U.S. prices were boosted by a stockpile draw, while a warning by OPEC producer Iraq that it may slow spending on new fields pushed up international crude contracts.
U.S. crude futures rose after industry group the American Petroleum Institute (API) reported a 3.1 million-barrel crude drawdown last week, versus analyst expectations for a build. A surge in American gasoline prices was also supportive.
Outside the United States, international crude contracts rose on reports that Iraq has told foreign companies developing the country’s southern oilfields that they may need to slash development spending next year because it has less money to pay them due to a slump in crude prices.
Front-month U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $45.01 per barrel at 0109 GMT on Wednesday, up 42 cents from their last settlement. Internationally traded Brent futures LCOc1 were up 18 cents at $47.93 a barrel.
Despite the potential cut in Iraq’s oil spending, analysts said it would not immediately affect output from the second biggest producer in the Organization of the Petroleum Exporting Countries (OPEC).