Oil prices surged by almost 1% on Wednesday, trading near their highest since April, as crude and fuel products inventory data showing robust demand from the world’s biggest fuel consumer, the U.S., offset demand concerns elsewhere.
Brent crude futures for October rose 76 cents, or 0.90%, to $85.67 a barrel at 0407 GMT. Likewise, U.S. West Texas Intermediate crude for September climbed 76 cents, or 0.93%, to $82.13 a barrel.
U.S. oil inventories fell by 15.4 million barrels in the week ended July 28, according to market sources citing American Petroleum Institute figures, compared with analysts’ estimates for a drop of 1.37 million barrels.
If the U.S. government figures, due later on Wednesday, matches the industry drawdown number, it would mark the largest drop in U.S. crude inventories according to records dating back to 1982.
Gasoline inventories fell by 1.7 million barrels, the API data showed, compared with estimates for a 1.3 million barrel drop. Distillate stocks fell by 510,000 barrels, compared with analysts estimates for a build of 112,000 barrels. Both are indicators of robust prompt fuel demand in the U.S.
“The seasonal peak demand period (for transportation fuels) and supply cuts by oil producing countries have caused oil prices to rise,” said CMC Markets analyst Leon Li.