Oil prices gain 2% on falling U.S. stockpiles, Saudi warning

Oil prices rose 2% on Wednesday, after a large unexpected drawdown in U.S. crude inventories and a warning from the Saudi energy minister that raised the prospect of further OPEC+ production cuts.

Brent crude futures rose $1.52, or 2%, to settle at $78.36 a barrel. U.S. West Texas Intermediate crude (WTI) gained $1.43, or 2%, to $74.34.

U.S. crude inventories posted a massive surprise weekly drawdown of 12.5 million barrels to 455.2 million barrels, the Energy Information Administration said, as imports declined. Analysts had expected an 800,000-barrel rise.

U.S. gasoline stocks dropped by 2.1 million barrels in the week to 216.3 million barrels, the EIA said, while distillate stockpiles fell by 600,000 barrels to 105.7 million barrels.

The U.S. Memorial Day holiday on May 29 marks the beginning of the peak summer travel season and higher fuel demand.

“Refiners are absolutely going max out with refinery runs right now, trying to keep up with demand,” said Phil Flynn, an analyst at Price Futures Group.

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