The prices of crude oil in the international market rose by two per cent Wednesday after a surprise drop in crude stockpiles reported by the United States Government for a third week in a row.
Brent crude futures were up 1.8 per cent Wednesday to settle at $46.68 per barrel after it had risen more than $1.20 at the session high.
US West Texas Intermediate (WTI) crude futures were up $1.05 cents, or 2.4 percent, at $45.10, versus a session peak of $45.49.
The US Energy Information Administration (EIA) said domestic crude inventories fell by 6.2 million barrels for the week ended September 16, against a 3.4 million-barrel drop forecast by oil market analysts polled by Reuters.
Crude oil stocks in the US, which is the world’s largest consumer of crude oil have fallen since the beginning of this month.
Some 14.5 million barrels were reported drawn for the week ended September 2, the biggest weekly drop in 15 years after a tropical storm that slowed the arrival of oil imports in the US Gulf Coast.
In the subsequent week to September 9, there was another decline of 559,000 barrels.
While the draws have put a bullish face of sorts on oil, they also contrast with surging production from Organisation of Petroleum Exporting Countries (OPEC) and other major producers such as Russia, causing a swing in crude oil prices lately.
Some market participants also expressed surprise with the crude draw announced by the EIA when crude imports as a whole rose and refinery runs fell.
US crude oil imports rose last week by 77,000 barrels per day, although they dropped sharply in the US Gulf, falling to 2.88 million bpd from 3.41 million bpd in the previous week.
A comment by the Secretary General of the OPEC, Mr. Mohammed Barkindo, that a planned agreement on possible cut in production could last up to one year had helped gradual recovery of oil prices in recent days.
Saudi Arabia, Iran, Iraq, Nigeria and Libya, five of OPEC’s largest oil exporters, have all raised or been trying to hike output in recent months even while talking of a production cut.