Oil recovers on big US crude stock drawdown
Brent crude was up 50 cents, or 0.8 percent, at $63.84 a barrel by 0152 GMT. It had settled down $1.35, or 2.1 percent, at $63.34 on Tuesday on a wave of profit-taking after news of a key North Sea pipeline shutdown helped send the global benchmark above $65 for the first time since mid-2015.
U.S. West Texas Intermediate crude was up 36 cents, or 0.6 percent, at $57.50 a barrel, having earlier settled down 85 cents at $57.14.
After settlement on Tuesday, industry group the American Petroleum Institute said crude stocks in the United States fell by 7.4 million barrels last week. That is almost twice the decline of analysts’ expectations for a decline of 3.8 million barrels.
Gasoline stocks rose by 2.3 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.5 million-barrel gain. Distillate fuels stockpiles, which include diesel and heating oil, rose by 1.5 million barrels, compared with expectations for a 902,000-barrel gain, the API data showed.
The U.S. government’s Energy Information Administration releases its weekly oil report later on Wednesday.
Selling had gained pace on Tuesday after the U.S. Energy Information Administration said in its monthly short-term energy outlook that U.S. crude oil output will rise by 780,000 barrels per day (bpd) to a record-high of 10.02 million bpd in 2018.
But some analysts said that despite the projected rise in U.S. production, oil prices are likely to see further upward momentum given planned output curbs by the Organization of Petroleum Exporting Countries and a rise in global oil demand.