Investing.com - West Texas Intermediate oil extended gains in North American trade on Wednesday, after weekly data showed that oil supplies in the U.S. registered a larger-than-expected draw.
Crude oil for October delivery on the New York Mercantile Exchange rose $1.37, or 1.92%, to trade at $70.62 a barrel by 10:33 AM ET (14:33 GMT) compared to $70.42 ahead of the report.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 5.296 million barrels in the week ended Sept. 7. Market analysts had expected a crude-stock draw of 1.300 million barrels, while the American Petroleum Institute late Tuesday reported a supply decrease of 8.636 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 1.242 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 396.2 million barrels as of last week, according to press release, which the EIA indicated was “about 3% below the five year average for this time of year”.
The report also showed that gasoline inventories increased by 1.250 million barrels, compared to expectations for a build of 1.321 million barrels, while distillate stockpiles rose by 6.163 million barrels, compared to forecasts for a gain of 1.446 million.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for November delivery traded up 83 cents, or 1.05%, to $79.89 by 10:35 AM ET (15:35 GMT), compared to $79.63 before the release.
Meanwhile, Brent's premium to the WTI crude contract stood at $9.19 a barrel by 10:36 AM ET (15:36 GMT), compared to a gap of $9.81 by close of trade on Tuesday.
In other oil news, the potential impact of Hurricane Florence, that is moving towards the east coast of the United States, added to market concerns about U.S. sanctions on Iran to power an overnight spike in oil prices that was the largest spike since June.
Reports suggest Iranian oil exports are beginning to take a hit as buyers look for alternative supplies in the face of U.S. sanctions, which will take effect on Nov. 4.
Hurricane Florence, a large Category 4 storm, is approaching North Carolina and South Carolina. It is expected to reach the continental U.S. this week.
People have been buying gasoline ahead of the storm and the surge in demand led to a spike in demand for refined products and crude.
As part of an effort to keep oil prices from spiking, U.S. energy officials have been meeting with their counterparts from Saudi Arabia and Russia this week. The three countries are the largest oil producers in the world. The U.S. wants to ensure Saudi Arabia and Russia keep supplies up to limit price rises.
U.S. Energy Secretary Rick Perry met Saudi Energy Minister Khalid al-Falih on Monday. They discussed the state of global oil markets, potential for U.S.-Saudi civil nuclear cooperation along with efforts to share technologies for the production of clean fuels, according to a statement from the U.S. Department of Energy.
Perry will also meet with Russian Energy Minister Alexander Novak on Thursday in Moscow, a U.S. source and a diplomatic source told Reuters on Sunday night.