On Wednesday crude prices rose 3% and bounced back from multi-month lows, after data showed a larger-than-expected decline in U.S. crude stockpiles, although concerns persisted about weak crude demand in China.
Brent crude futures were $2.13, or 2.8% higher at $78.61 per barrel and U.S. West Texas Intermediate crude was $2.36, or 3.22% higher at $75.56 per barrel.
Government data showed U.S. crude inventories dropped for the sixth straight week and last week dropped by 3.7M barrels to 429.3M barrels, more than analysts had expected for a draw of 700K barrels.
An analyst at Price Futures Group, Phil Flynn, said demand was stronger than people believed, and overall supplies were tighter. He noted crude supply was lower than average for this time of year.
Tuesday’s data from the American Petroleum Institute showed an unexpected build in gasoline and crude inventories.
Brent dropped to its lowest level since Jan. on Monday and WTI plunged to its lowest since Feb., after weak jobs data led to a stock market rout globally that deepened on worries of a potential recession in the U.S.
On Tuesday both benchmarks broke a 3-session losing streak.
Middle Eastern tensions continued to stoke supply worries on Wednesday and this supported prices.
