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Oil surges over 2% to June highs on another US crude draw

Wednesday, October 5, 2016 - 23:33

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Oil prices hit session highs on Wednesday, rising to their highest since June, after the US government reported another surprise weekly drawdown in crude inventories.

[NEW YORK] Oil prices hit session highs on Wednesday, rising to their highest since June, after the US government reported another surprise weekly drawdown in crude inventories.

Brent crude was up US$1.13, or 2.2 per cent, at US$52 a barrel by 10:58 am EDT (1458 GMT), peaking at US$52.09, its highest since June 10.

US West Texas Intermediate (WTI) crude was up US$1.20, or 2.4 per cent, at US$49.89. It earlier hit US$49.95, a high since June 29.

The US Energy Information Administration (EIA) said crude stockpiles fell nearly 3 million barrels for the week ended Sept 30, marking a fifth straight weekly drop.

Analysts polled by Reuters had forecast a build of 2.6 million barrels. But the American Petroleum Institute (API), a trade group, on Tuesday set market expectations for an inventory decline by reporting a 7.6 million-barrel drop.

"Hence positive news has already been baked in the cake, and prices could ease lower from here, especially given the rampant rally of recent days," said Matt Smith, analyst at New York-based Clipperdata, which analyses data and impact from crude cargoes and supplies.

REUTERS

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