Oil prices rose sharply on Wednesday after U.S. government data showed crude and fuel inventories fell more than expected, reinforcing expectations that the long-oversupplied market was moving toward balance.
Figures released Wednesday by the U.S. Energy Information Administration showed crude inventories fell by 7.2 million barrels in the week ending July 21, to 487 million, compared with expectations for a drop of 2.6 million barrels.
Prices were already on the upswing on Wednesday after preliminary, less comprehensive data from industry group the American Petroleum Institute suggested inventories declined by 10.2 million barrels.
Brent crude futures were up 62 cents, or 1.2%, to $50.82 U.S. a barrel late morning Wednesday. U.S. West Texas Intermediate futures climbed 77 cents, or 1.6% to $48.66 U.S. a barrel.
Gasoline stocks fell by one million barrels, compared with analyst expectations for a 614,000-barrel drop. EIA data showed distillate stockpiles, which include diesel and heating oil, declined by 1.9 million barrels, versus expectations for a 453,000-barrel drawdown.
The market received support earlier this week when Saudi Arabia said on Monday it would limit oil exports to 6.6 million barrels per day (bpd) in August, down nearly one million bpd from a year earlier.
