The price of Brent crude oil jumped more than 2 percent to $50 a barrel on Wednesday as a drawdown in U.S. crude oil stocks outweighed the negative impact of weak economic manufacturing data from China.
The U.S. Energy Information Administration said U.S. crude inventories fell 1.9 million barrels to 453.97 million last week, exceeding analysts expectations of a draw of 500,000 barrels.
The data was broadly in line with a report on Wednesday by the American Petroleum Institute (API), which had said U.S. crude stockpiles fell 3.7 million barrels last week.
Although total U.S. oil inventories are near record highs, the draw suggests a rebalancing of the world’s biggest domestic oil market is under way as oil production slows in the face of low prices.
“We had a bigger drawdown in crude than expected,” said Oliver Sloup, director of managed futures at Chicago-based iiTrader.com. “The drawdown is giving us a bit of a boost and that’s prompted some short covering.”
Benchmark Brent for November was up $1.00 a barrel at $50.08 by 1445 GMT. U.S. light crude for November traded up 65 cents at $47.00.
The U.S. industry data helped oil resist the negative impact of a sharp contraction in Chinese manufacturing, which darkened the outlook for the world economy.