Investing.com - Crude futures shot up on Wednesday after data revealed a steep drop in U.S. inventories when markets were expecting a build, which offset concerns of a global supply glut.
In the New York Mercantile Exchange, West Texas Intermediate crude oil for delivery in November traded up 1.11% at $92.17 a barrel during U.S. trading. New York-traded oil futures hit a session low of $91.24 a barrel and a high of $92.96 a barrel.
The November contract settled down 3.61% at $91.16 a barrel on Tuesday.
Nymex oil futures were likely to find support at $90.86 a barrel, Tuesday's low, and resistance at $94.64 a barrel, Monday's high.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories decreased by 1.4 million barrels in the week ended September 26, compared to expectations for a gain of 0.7 million barrels.
Total U.S. crude oil inventories stood at 356.6 million barrels as of last week.
The report also showed that total motor gasoline inventories decreased by 1.8 million barrels, compared to forecasts for a decline of 0.8 million barrels, while distillate stockpiles declined by 2.9 million barrels.
Oil prices have taken a beating on fears global supply far exceeds demand, though Wednesday's data rekindled expectations for a more robust U.S. recovery to offset slumping European and Asian economies.
Mixed data out of the U.S. contained enough positive nuggets to keep Tuesday's buying spree going.
The Institute of Supply Management reported earlier that its manufacturing index fell to 56.6 in September from 59.0 in August.
Economists had expected the index to decline less and come in at 58.5, though oil rose anyway, as longer-term analyses of economic indicators point to a more robust U.S. economy despite potholes here and there.
The employment sub-index slowed to 54.6 from 58.1 in the previous month, while the new orders sub-index fell to 60.0 from 66.7.
At the same time, separate data revealed that U.S. construction spending fell 0.8% in August to an annual rate of $960.96 billion. Analysts were expecting a decline of only 0.5%.
Really supporting oil, however, was an upbeat report on the U.S. private-sector labor market.
Payrolls processor ADP reported that the U.S. private sector added 213,000 jobs last month, just ahead of expectations for jobs growth of 210,000. The economy created 202,000 jobs in August.
The report came ahead of Friday’s government nonfarm payrolls report, which includes both public and private sector employment.
Separately, on the ICE Futures Exchange in London, Brent oil futures for November delivery were up 0.67% at US$95.31 a barrel, while the spread between Brent and U.S. crude contracts stood at US$3.14 a barrel.