Oil Rose After Bigger US Weekly Drawdown in EIA Report

Oil prices rose more than 2% on Wednesday and hit their highest in about a month, buoyed by U.S. government data that showed a larger-than-expected drawdown in crude stocks as exports hit a record high, and surprise drops in refined product stockpiles.

Brent crude futures gained $1.43, or 2.2%, to $66.48 a barrel by 1:21 p.m. EDT (1721 GMT). U.S. West Texas Intermediate (WTI) crude futures rose $1.57, or 2.7%, to $59.40 a barrel.


West Texas Intermediate graph

Crude inventories fell 12.8 million barrels last week, the Energy Information Administration said, far surpassing analyst expectations for a decrease of 2.5 million barrels. That was the most since September 2016, according to the statistical arm of the Department of Energy.

Net U.S. crude imports fell last week by 1.2 million barrels per day (bpd). Overall crude exports rose to 3.8 million bpd, beating its previous record of 3.6 million bpd in February.

“A lot of this drawdown is due to strong demand,” said Phil Flynn, an analyst at Price Futures Group in Chicago. “We’re finally seeing the impact of OPEC production cuts and starting to see Venezuelan cuts.”

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza