Oil rises as US crude inventories drop for 7th straight week

Oil prices rose after data on Wednesday showed that supplies of US crude fell more than expected and were down for the seventh consecutive week.

Inventories of US crude fell by 4.4m barrels in the week ended May 19, according to the Energy Information Administration. That compared with Wall Street expectations for a smaller draw of 2.08m barrels and marked the longest streak of back-to-back declines since July 2016.

That saw West Texas Intermediate, the US crude marker, rise 0.4 per cent to $51.66 a barrel, while Brent, its global counterpart rose 0.4 per cent to $54.37 a barrel.

The drop came as oil imports averaged 8.3m barrels per day last week, down by 296,000 bpd from the previous week. At 516.3m barrels US crude stocks remain at historically high levels.

Meanwhile, at Cushing, Oklahoma, a key US delivery hub, oil stocks decreased by 741,000 barrels, compared with estimates for a draw of 95,000 barrels.

Stocks of gasoline, one of the products that crude is refined into, fell by 787,000 barrels, falling for the third consecutive week, compared with projections for a draw of 695,380 barrels.

The news comes ahead of Thursday’s Opec meeting, where the oil cartel and non-members like Russia are expected to extend the output cut deal by another nine-months, though markets will be watching for discussions about curbs for a longer duration.