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Crude prices rose more than 2% on Wednesday after government data showed U.S. oil inventories fell across the board, bolstering hopes that fuel demand in the world’s biggest economy will withstand the coronavirus pandemic.
Brent crude LCOc1 was up 95 cents, or 2.1%, at $45.44 a barrel by 11:02 a.m. EDT (1502 GMT), after falling around 1% on Tuesday.
West Texas Intermediate CLc1 oil was up $1.00, or 2.5%, at $42.61 a barrel, having dropped 0.8% in the previous session.
U.S. crude oil, gasoline and distillate inventories fell last week as crude production dropped sharply and refiners ramped up production, the Energy Information Administration said on Wednesday.
Crude inventories USOILC=ECI fell by 4.5 million barrels, the EIA said, compared with analysts’ expectations in a Reuters poll for a 2.9 million-barrel drop.
The report was “very supportive,” said Tony Headrick, energy markets analyst at CHS Hedging. “Looking beyond draws across the board, crude oil production finally caved in as anticipated, down 300,000 barrels.”
The EIA’s downward revision on Tuesday to a key U.S. oil production forecast for this year also lent support to prices.
U.S. crude production is forecast to fall 990,000 bpd this year to 11.26 million bpd, steeper than the 600,000 bpd decline it forecast last month.
World oil demand will fall by 9.06 million bpd this year, the Organization of the Petroleum Exporting Countries said in a monthly report on Wednesday, more than the 8.95 million bpd decline expected a month ago.
In India, refined fuels consumption fell to 15.68 million tonnes in July, down 11.7% year-on-year and 3.5% below June’s levels, data from the Petroleum Planning and Analysis Cell (PPAC) of the Ministry of Petroleum & Natural Gas showed.
