Investing.com – After a knee-jerk reaction to the downside, West Texas Intermediate oil held onto solid gains in North American trade on Wednesday, as weekly data showed that oil supplies in the U.S. registered a much larger-than-expected draw, although gasoline stockpiles unexpectedly increased and distillate inventories rose more than expected.
for October delivery on the New York Mercantile Exchange rose $1.63, or 2.48%, to trade at $67.47 a barrel by 10:45 AM ET (15:45 GMT) compared to $67.27 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that fell by 5.836 million barrels in the week ended August 17. Market analysts’ had expected a crude-stock draw of 1.497 million barrels, while the American Petroleum Institute late Tuesday reported a supply decrease of 5.170 million barrels.
, the key delivery point for Nymex crude, increased by 0.772 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 408.4 million barrels as of last week, according to press release, which the EIA indicated was “at the five year average for this time of year”.
The report also showed that increased by 1.200 million barrels, compared to expectations for a decline of 0.488 million barrels, while rose 1.849 million barrels, compared to forecasts for a gain of 1.463 million.
Elsewhere, on the ICE Futures Exchange in London, for October delivery traded up $1.57, or 2.16%, to $74.20 by 10:46 AM ET (15:46 GMT), compared to $74.12 before the release.
Meanwhile, Brent’s premium to the WTI crude contract stood at $6.83 a barrel by 10:47 AM ET (15:47 GMT), compared to a gap of $6.79 by close of trade on Tuesday.
Along with the decline in available stockpiles stateside, the U.S. economic sanctions on Iran, which would start to take effect in November, have also supported prices as traders focus on the potential decrease in supplies.
Several European companies have already cut back on purchases from Iran, although China seemed to be turning a blind eye to the U.S. policy.
Reuters reported on Monday that Chinese buyers of Iranian oil were beginning to shift their cargoes to vessels owned by National Iranian Tanker Co for nearly all their imports as Beijing cuts its purchases from the U.S. amid the ongoing trade tensions.
U.S. and Chinese officials were expected to resume talks on Wednesday, but U.S. President Donald Trump predicted there will be no real progress at this stage.
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Source: Investing.com
