Oil prices edge up on surprise drawdown in U.S. crude stockpiles

TOKYO (Reuters) – U.S. oil prices extended gains on Wednesday after industry data showed a surprise decline in U.S. crude inventories.

U.S. West Texas Intermediate crude () was up 35 cents, or 0.5 percent, at $72.27 a barrel by 0007 GMT on Wednesday, having settled up 14 cents.

Brent crude () was up 36 cents, or 0.4 percent, at $81.77 a barrel, after settling up 63 cents the session before. The global benchmark, which hit a more than two-week low late last week as equity markets dropped, is trading about $5 below a four-year high of $86.74 marked on Oct. 3.

U.S. crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday’s settlement. [API/S]

Gasoline stocks dropped by 3.4 million barrels, compared with analyst expectations in a Reuters poll for a 1.1 million-barrel decline. Distillate fuel stockpiles, which include diesel and , declined by 246,000 barrels, compared with expectations for a 1.3 million-barrel drop, the API data showed.

Inventory data from the U.S. Energy Department’s Energy Information Administration is due at 1430 GMT on Wednesday.

U.S. President Donald Trump has urged the Organization of the Petroleum Exporting Countries to raise output to help cover a shortfall due to new U.S. sanctions on Iran.

The market has been supported by reports that Iranian crude exports may be falling faster than expected ahead of Nov. 4, the date sanctions on the commodity are due to start.

The market has also been supported amid growing U.S. tensions with top exporter Saudi Arabia over the disappearance of Saudi journalist Jamal Khashoggi.

Meanwhile, OPEC Secretary-General Mohammad Barkindo on Tuesday urged oil producing companies to increase capacities and invest more to meet future demand as spare oil capacity shrinks worldwide.

The Russian government is no longer capping oil output increases by local producers, one of the country’s top energy companies, Gazprom (MCX:) Neft, said on Tuesday, signaling that Moscow’s supply-restraint pact with OPEC has effectively expired for now.

OPEC and its allies including Russia agreed to reduce output by 1.8 million barrels per day (bpd) from the start of 2017 with Moscow pledging to cut some 300,000 bpd.

As oil prices hit $80 per barrel in recent months and with global oil inventories shrinking fast, Saudi Arabia and Russia agreed to ease restrictions although they never said the exact levels they would target.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.