Investing.com - Crude oil prices jumped in Asia on Wednesday after a U.S. industry report showed a ssolid drop in domestic supplies.
The American Petroleum Institute said crude stocks dipped 958,000 barrels last week, less than than the 1.1 million drop seen, but gasoline stocks also dropped 2.041 million barrels. Distillate stocks rose 4.2 million barrels.
On the New York Mercantile Exchange, WTI crude for August delivery rose 0.89% to $52.80 a barrel.
Separately, Wednesday's report from the Energy Information Administration could show that U.S. crude inventories fell by 0.5 barrels for the week ending on July 3. Last week, the EIA said U.S. stockpiles rose by 2.4 million barrels for the week ending on June 26, halting an eight week streak of weekly draws.
Also in focus, Greece has a five-day deadline to submit a detailed package of reforms to international creditors in return for a bailout or risk the "bankruptcy" of both the country and its financial system, European Council President Donald Tusk and Commission President Jean-Claude Juncker warned Tuesday.
In a high-stakes atmosphere that followed a meeting of euro zone leaders in Brussels after Greece's Sunday austerity referendum, Tusk and Juncker did not mince words.
"The stark reality is that we have only five days left to find an ultimate agreement," Tusk said. "Until now I've avoided talking about deadlines, but tonight I have to say it loud and clear: the final deadline ends this week."
Overnight, crude futures extended losses from Monday's massive sell-off amid a stronger dollar, as western powers extended a deadline for a nuclear deal with Iran and optimism for a breakthrough in Greek Debt negotiations faded.
On the Intercontinental Exchange (ICE), Brent crude for August delivery dipped to a session low of $55.10, its lowest level since late-March, before rallying to settle at $56.92 a barrel on Tuesday.
In Vienna, talks between Iran and its Western negotiating partners continued after the sides failed to reach a deal on a final agreement by Tuesday's deadline. The stalemate dragged on, even as the U.S. State Department insisted that the two sides had achieved significant progress in the longstanding negotiations over the last 24 hours. The sides set a new deadline for Friday.
A nuclear deal is viewed as bearish for crude, as Iran reportedly hoards 30 million barrels of crude in its reserves ready for export. An outflow of Iranian oil could depress crude prices in a global market already oversaturated by a glut of oversupply. It is widely believed that Iran will ramp up exports if a plethora of severe economic sanctions are lifted by western powers.
A sell-off in Chinese equities and the reopening of a key oil terminal in Libya also weighed, as crude futures experienced its worst two-day performance in more than four years.