Investing.com - WTI crude oil prices settled higher Wednesday as a large draw in U.S. crude supplies and a drop in output lifted sentiment.
On the New York Mercantile Exchange crude futures for October delivery rose 1.6% to settle at $70.37 a barrel, while on London's Intercontinental Exchange, Brent rose 0.80% to trade at $76.69 barrel.
Inventories of U.S. crude fell by 5.296 million barrels for the week ended Sept. 7, beating expectations for a draw of 1.300 million barrels, according to data from the Energy Information Administration (EIA).
The large draw in crude supplies comes as imports fell by about 0.443 million barrels per day (bpd), while exports declined by 0.320 million bpd, data from EIA showed.
Gasoline inventories rose by 1.250 million barrels, less than expectations for a build of 1.321 million barrels, while supplies of distillate -- the class of fuels that includes diesel and heating oil -- rose by 6.163 million barrels, well above expectations for an increase of 1.446 million barrels.
The build in products emerged as refinery activity rose to 97.6% of their capacity last week from 96.6% the prior week, with crude inputs averaging about 17.857 million barrels per day, up 0.210 million barrels from the prior week, the EIA said.
Production fell to 10.9 million bpd, down 0.100 million bpd from last week, but remained near record highs.
The rise in crude oil prices comes amid a mixed monthly report from OPEC, in which the oil cartel slashed its non-OPEC supply projections for this year and 2019, but lowered demand projections.
OPEC said it expected demand growth of 1.41 million bpd in 2019, a 20,000-bpd downgrade from its previous forecast.
OPEC production for August (from secondary sources) was up 0.278 million bpd to 32.57 million bpd, supported by increased output in Libya, Iraq, Nigeria and Saudi Arabia, partly offsetting decreases in Iran & Venezuela.
OPEC production has been rising since the oil cartel agreed in June to lift curbs on output restrictions in a bid to avert a shortage in global stockpiles amid expectations for a fall in Iranian crude exports as U.S. sanctions loom.
President Donald Trump pulled the United States out of the Iran nuclear agreement in May, allowing sanctions against Iran to snap back into place. The first wave of sanctions went into effect last month and a second set of sanctions on Iran's crude exports are slated for early November.
Oil-market observers were also watching the impact of Hurricane Florence -- expected to make landfall in North Carolina on Thursday or Friday -- though analysts have said disruptions to crude supplies are unlikely.
Trump said Tuesday he expects that Hurricane Florence will be one of the worst storms in decades and urged everybody to "get out" if they are in the path of the storm.