Investing.com -- Crude futures plunged to fresh two-month lows before staging a sharp reversal on Wednesday after a larger than expected draw in U.S. stockpiles and a considerable increase in gasoline inventories last week.
On the New York Mercantile Exchange, WTI crude for September delivery traded between $44.55 and $46.08 a barrel before closing at $45.70, up 0.25 or 0.55% on the session. On the Intercontinental Exchange (ICE), brent crude for September delivery wavered between $45.91 and $47.49 a barrel, before settling at $47.15, up 0.49 or 1.05% on the day. Both the U.S. and international benchmarks of crude are down approximately 4% over the last month, erasing all of their Post-Brexit gains.
On Wednesday morning, the U.S. Energy Information Administration (EIA) said in its Weekly Petroleum Status Report that commercial crude inventories declined by 2.342 million barrels for the week ending on July 15. At 519.5 million barrels, inventories remain at historically high levels for this time of year. Investors expected to see a draw of 2.1 million barrels, while the American Petroleum Institute reported declines of 2.3 million on Tuesday night after the close of trading. Crude inventories nationwide have now declined in nine consecutive weeks.
At the Cushing Oil Hub in Oklahoma, crude inventories rose by 189,000 barrels, defying expectations for a 100,000 decline. Cushing, the main delivery point for NYMEX oil, is the largest storage facility in the U.S.
Notably, gasoline inventories rose by 0.91 million barrels for the week, while distillate fuel inventories fell slightly by 0.21 million. It came one week after distillate fuel stockpiles nationwide surged by more than 4.0 million barrels, posting their largest weekly increase in more than five months. Analysts expected to see a draw of 0.5 million barrels in gasoline inventories.
Meanwhile, U.S. production rose moderately by 9,000 last week to 8.494 million barrels per day. Crude output still remains down by more than 1 million bpd from last summer's high of 9.604 million bpd when production surged to a 44-year high.
In Libya, Reuters reported that exports at the port of Hariga resumed operations after a brief protest among workers on missed payments ended. The port, which is located near the Sarir oil field, has a capacity for about 120,000 bpd in exports.
The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose by more than 0.20% to an intraday high of 97.37. At session-highs, the index reached its highest level since March 10.
Dollar-denominated commodities such as crude become more expensive for foreign investors when the dollar appreciates.