U.S. crude oil inventories fell unexpectedly last week, putting an end to the two prior weekly builds, according to official government data released on Wednesday.
The Energy Information Administration said in its regular weekly report that crude oil inventories decreased by 3.96 million barrels in the week to May 3.
That was compared to forecasts for a stockpile build of 1.22 million barrels, after a surge of 9.93 million barrels in the previous week.
The EIA report also showed that gasoline inventories declined by 0.6 million barrels, compared to expectations for a draw of 0.43 million barrels, while distillate stockpiles decreased by 0.16 million barrels, compared to forecasts for a decline of 1.10 million.
U.S. crude prices extended gains immediately following the data release, rising 0.7% at $61.80 a barrel by 10:34 AM ET (14:34 GMT), compared to $61.63 prior to the publication.
London-traded Brent crude futures gained 0.2% to $70.05 a barrel, compared to $69.99 ahead of the release.
“The headline crude draw is definitely bullish, given the expectations for a continued rise after last week's humongous 10-million-barrel build,” senior commodity analyst Barani Krishnan said following the report.
He noted that slightly-larger-than-expected draw in gasoline inventories will also “put a little more octane in the bulls’ tanks” despite the fact that the draw on distillates was smaller than forecast.
“That the gasoline draw came on the back of higher product output is also noteworthy as refinery output is still below the 90% norm for this time of year”, Krishnan added.
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