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Oil futures traded higher Wednesday, lifted after an industry trade group showed an unexpected drop in U.S. crude inventories last week.
West Texas Intermediate crude for September delivery CL.1, +1.04% CLU20, +1.04% on the New York Mercantile Exchange was up 39 cents, or 1%, at $41.43 a barrel. September Brent BRN00, +1.21%, the global benchmark, was up 49 cents, or 1.1%, at $44.10 a barrel on ICE Futures Europe.
The American Petroleum Institute late Tuesday said that U.S. crude supplies fell by 6.8 million barrels last week, according to sources, while gasoline inventories rose by 1.1 million barrels and distillate stocks rose by 187,000 barrels. Crude stocks in Cushing, Oklahoma, the Nymex delivery hub, were up by 1.1 million barrels.
“Oil has been trading well since the surprise draw in the API,” with traders covering short positions ahead of Energy Information Administration data, said Stephan Innes, chief global markets strategist at AxiCorp, in a note.
More closely followed data from the Energy Information Administration is due Wednesday morning. The government figures are expected to show crude inventories declined by 1.2 million barrels last week, according to analysts polled by S&P Global Platts. They also forecast a supply decline of 2 million barrels for gasoline and for no change in distillate inventories.
Oil bulls were also taking comfort in a weaker U.S. dollar, which correlates with stronger crude prices. The ICE U.S. Dollar Index DXY, -0.03%, a measure of the U.S. currency against a basket of six major rivals, was down 0.2% Wednesday morning after edging to a two-year low.
