Futures on US West Texas Intermediate Crude Oil extended gains from the prior four trading days on Wednesday, as a substantial drop in US crude stocks last week indicated firm demand.
The most recent data by the American Petroleum Institute showed crude oil inventories had decreased by 11.486 million barrels in the week ending August 25th, following a 2.418 million barrel draw in the prior week.
It has been the most significant decrease in crude inventories since the week ending September 2nd 2016. Analysts on average had expected a much smaller decrease – by 2.9 million barrels.
WTI Crude Futures gained more than 1% on Tuesday, as the US Dollar eased on reduced odds of further Federal Reserve rate hikes after softer-than-expected JOLTs job openings data for July.
In addition, concerns surrounding the Hurricane Idalia, which crawled toward Florida’s Gulf Coast, have prompted fresh buying of oil futures.
The offshore Gulf of Mexico accounts for nearly 15% of US oil production and roughly 5% of the nation’s natural gas output.
Energy giant Chevron Corp has evacuated some personnel from that area, but oil production was kept uninterrupted at its Gulf of Mexico sites.
Meanwhile, supply of the commodity is expected to remain tight, as Saudi Arabia will likely extend its voluntary production cut into October.
As of 9:53 GMT on Wednesday WTI Crude Oil Futures for October delivery were gaining 0.73% to trade at $81.75 per barrel.
At the same time, Brent Oil Futures for November delivery were gaining 0.58% on the day to trade at $85.40 per barrel.
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