NYMEX crude oil gains in Asia as API data shows sharp drop, EIA ahead

Investing.com - Crude oil prices rose in Asia on Wednesday in a rebound from overnight lows and a solid drop in U.S. stocks reported by an industry group.

The American Petroleum Institute said crude oil supplies in the U.S. last week fell 5.2 million barrels, while gasoline stocks eased 1.2 million barrels. Gasoline supplies are watched closely this time of year ahead of the U.S. summer driving season when demand normally grows.

API data on distillates was not available.

The data comes ahead of more closely-watched U.S. government figures later Wednesday. Last week, the Energy Information Administration, or EIA, said crude inventories nationwide dropped by 2.2 million barrels for the week ending May 8, marking the first time this year that stockpiles fell on a weekly basis.

On the New York Mercantile Exchange, WTI crude for July delivery rose 0.65% to $58.37 a barrel.

Overnight, crude futures fell sharply on Tuesday, amid a stronger dollar and record output by Saudi Arabia as the race between the U.S. and OPEC for global market share of crude continues to escalate.

On the Intercontinental Exchange (ICE), Brent crude for July delivery also tumbled falling $2.14 or 3.23% to $64.13 a barrel on Tuesday.

Saudi Arabian oil minister Ali al-Naimi said the kingdom pumped 10.3 million barrels per day in March, slightly above its previous record high of 10.2 million bpd in August, 2013. Saudi Arabia, the world's largest exporter, also exported nearly 8 million bpd on the month, its highest level in nearly 10 years.

Despite a glut of oversupply in the global crude market, Al-Naimi has resisted calls over the last six months to slash production. In April, OPEC increased output by 160,000 bpd for the month from an upward revised 960,000 bpd gain in March. OPEC's supply level for April exceeded 31.2 million bpd, its highest level since September, 2012.

Last November, OPEC sent crude prices crashing when it decided to keep daily production levels constant triggering a protracted battle with the U.S for market share.

Previously, U.S. stockpiles peaked above 480 million barrels – the highest level in at least 80 years.

The draw has eased fears that the U.S. could reach full storage capacity in the near future, a doomsday scenario that could cause crude prices to plunge even further. WTI futures have declined by more than 40% since reaching triple digits last spring.