Crude-oil futures added to gains Wednesday after a weekly government report showed a larger-than-expected drop in supplies.
Oil for September delivery rose 58 cents, or 0.7%, to $88.66 U.S. a barrel on the New York Mercantile Exchange.
That recouped some of the losses in the previous session, when the contract fell $1.72 to $88.06 U.S. a barrel, its lowest settlement since mid-July. Doubts have crept in about the prospects for more stimulus from U.S. and Europe central banks.
The Energy Information Administration on Wednesday reported a drop of 6.5 million barrels of supplies for the week ended July 27.
Analysts polled by Platts had expected a decline of 1.6 million.
The EIA also reported gasoline inventories dropped 2.2 million barrels, and stockpiles of distillates were down 1 million barrels.
The analysts surveyed by Platts had expected gasoline supplies up 400,000 barrels and distillates inventories up 1.6 million barrels.
Gasoline for September delivery rose six cents, or 2%, $2.83 U.S. a gallon. September heating oil gained two cents, or 0.8%, to $2.87 U.S. a gallon.
Investors are awaiting the outcome of the Fed’s two-day monetary policy meeting, at which the central bank is widely expected to pledge to keep interest rates low for longer.
Meanwhile, ADP Employer Services said U.S. companies added 16,000 jobs in July. U.S. stock futures retained modest gains after the data.
The European Central Bank and Bank of England both meet Thursday.
A bout of downbeat data from China kept gains for oil in check. The country is a big user of natural resources. Two separate surveys of manufacturers showed employment and export orders as weak spots for factories in the country. China manufacturing data call out for easing.
The ICE dollar index, which measures the dollar against a basket of six rival currencies, turned higher after manufacturing data in the U.S., to 82.714 from 82.705 on Tuesday.
A weaker dollar is positive for oil and other dollar-denominated commodities as it makes them cheaper to holders of other currencies.
The U.S. manufacturing sector remained in contraction territory, with the ISM index nearly unchanged from the previous month, edging up to 49.8% from 49.7% in June.
Among other energy contracts, natural gas for September delivery fell six cents to $3.14 U.S. per million British thermal units.
