Oil Futures Rally as US Stockpiles Slide for Second Week

Crude oil futures headed higher on Wednesday after a wider-than-expected decrease in weekly US crude stockpiles, the second consecutive draw, and ahead of the start of a meeting of top producing nations in Vienna.

West Texas Intermediate, the main US oil type, rose 2% to $66.17 a barrel at the time of writing. Brent, the international gauge, climbed 0.5% to $75.48 a barrel.

US commercial crude oil inventories decreased by 5.9 million barrels in the week ending June 15 to 426.5 million, according to data published by the Energy Information Administration.

That’s compared with the prior week’s drop of 4.1 million barrels and the American Petroleum Institute’s forecast, released on Tuesday, for a draw of about 3 million barrels. The EIA said the new data show inventories are about 2% below the five-year average for the time of year.

Oil prices had recovered losses this year amid stronger demand, geopolitical jitters that have weighed on supply outlooks, and draws in stockpiles. But in recent days, crude has retreated amid speculation that the Organization of Petroleum Exporting Countries will look to raise production levels in this week’s meeting.

Refinery operations rose to 96.7% of capacity from about 95.7% a week earlier, with inputs averaging about 17.7 million barrels per day during the week, up 196,000 barrels in the prior week, the EIA said Wednesday.

Total motor gasoline inventories increased by 3.3 million barrels from a decline of 2.3 million barrels a week earlier. Distillate fuel inventories rose by 2.7 million barrels after a drop of 2.1 million barrels the prior week. And propane/propylene inventories were up by 3.2 million barrels, compared with a gain of 3.7 million barrels in the week earlier.

Receive News & Ratings Via Email - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings with MarketBeat.com's FREE daily email newsletter.