Crude oil prices rose sharply on Wednesday, extending gains from previous session, after data showed a much larger drop in U.S. crude inventories in the week ended September 11.
A sharp drop in U.S. offshore output due to the impact of Hurricane Sally, which made landfall near Gulf shores, Alabama this morning, further supported oil prices.
West Texas Intermediate Crude oil futures for December ended up $1.88 or about 4.9% at $40.16 a barrel.
Brent crude futures were up $1.64 or about 4.1% at $42.17 a barrel.
According to the data released by the Energy Information Administration (EIA), crude oil stockpiles fell as much as 4.4 million barrels last week, more than 3.5 times the expected drop, to 496 million barrel.
The report also said gasoline stocks in the U.S. dropped by 400,000 barrels last week.
According to the data, oil stored at Cushing, Oklahoma, fell by 74,000 barrels last week after a build of 1.8 million barrels the prior week.
On Tuesday evening, the American Petroleum Institute (API) released a report that showed crude stockpiles fell 9.5 million barrels in the week ended September 11. The report also said gasoline inventories were up 3.8 million barrels in the week and distillate stockpiles dropped by 1.1 million barrels.
OPEC+ oil ministers are scheduled to meet tomorrow to review the supply pact. The group is widely seen refraining from recommending further output cuts for the year.
The material has been provided by InstaForex Company – www.instaforex.com