Investing.com – Crude futures settled higher on Wednesday, as investors cheered the release of a bullish report from the Energy Information Administration (EIA), showing U.S. crude inventories fell for a sixth-straight week.
On the New York Mercantile Exchange crude futures for June delivery gained 41 cents to settle at $49.07 a barrel, while on London's Intercontinental Exchange, Brent added 48 cents to trade at $52.13 a barrel.
For the week ended May 12, the EIA said that crude oil inventories fell by 1.75 million barrels, compared to expectations of a draw of around 2.4 million barrels.
Meanwhile, gasoline inventories dropped by only 0.413 million against expectations for a draw of 0.731 million barrels while distillate stockpiles fell by 1.94 million barrels, compared to expectations of a 1 million decline.
The smaller than expected drawdown in both crude and gasoline inventories caused oil prices to dip but losses were pared later during session, as investors turned attention to OPEC’s meeting on May 25.
OPEC is increasingly expected to extend the current deal to cut production at its meeting next week amid growing support for a deal extension from OPEC nations such as Kuwait, Iraq, Oman and Venezuela.
A report from the International Energy Agency (IEA) on Wednesday, however, warned that OPEC’s effort to rein in the glut in supply may fail even if the oil group agrees to extend its supply-cut agreement.
Despite the recent rally, oil futures have erased most of the gains achieved since November, when OPEC and other producers, including Russia, agreed to cut output by about 1.8 million barrels per day (bpd).