Bigger-Than-Expected Drop in U.S. Crude Stockpiles Stokes Price Rise

Oil futures rose on Wednesday as U.S. crude stockpiles fell last week, countering doubts about Russia's willingness to extend substantially a deal among exporters to curb output.

Brent crude futures were up 35 cents on the day at $63.96 U.S. a barrel late morning Wednesday, while U.S. light crude rose 23 cents to $58.22 U.S. a barrel.

Data released Wednesday by the U.S. Energy Information Administration revealed U.S. commercial crude inventories dropped by 3.4 million barrels, versus expectations for a 2.3-million-barrel drawdown.

Inventories at the closely watched Cushing, Oklahoma delivery hub fell by 2.9 million barrels to 58.3 million barrels last week, its biggest weekly draw since Sept 2009.

Gasoline stocks rose by 3.6 million barrels, compared with analysts' expectations in an economist poll for a 1.2-million-barrel gain. EIA data showed distillate stockpiles, which include diesel and heating oil, jumped by 2.7 million barrels, versus expectations for a 230,000-barrel increase.

Oil ministers from the Organization of the Petroleum Exporting Countries and other producers began gathering in Vienna on Wednesday to discuss extending a deal that has so far reduced crude oil production by 1.8 million barrels per day (bpd) and helped boost oil prices by 40% since the middle of the year.

The deal between most OPEC members and other major exporters including Russia is scheduled to expire in March 2018.