Investing.com - Crude oil prices gained in Asia on Wednesday as an industry survey showed a surprisingly large drop in U.S. stocks.
The American Petroleum Institute said crude oil stocks fell 7.3 million barrels last week, compared to an expectation of a 1.9 million barrel drop. Data on refined products was not immediately available. The API data sets the tone for more closely-watched figures due from the U.S. Department of Energy on Wednesday.
Crude oil for delivery in October on the New York Mercantile Exchange rose 0.50% to trade at $39.50 a barrel.
On Monday, New York-traded oil futures tumbled to $37.75, a level not seen since February 2009, before closing at $38.24, down $2.21, or 5.46%.
Overnight, crude oil futures extended strong gains on Tuesday, after China's central bank cut interest rates, as Beijing steps up efforts to boost economic growth and halt a stock market rout.
The People's Bank of China cut interest rates by 25 basis points to 4.6%. The bank also cut the reserve requirement ratio for large lenders by 0.5% to 18.0%.
Chinese equities have lost nearly 30% over the past two weeks amid growing fears over China's slowing economy.
The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Fears over a global economic downturn, led by a slowdown in China’s economy have intensified in recent days, accelerating a selloff in equities, commodities and emerging-market assets.
On the ICE Futures Exchange in London, Brent oil for October delivery jumped $1.28, or 3%, to trade at $43.97 a barrel during U.S. morning hours.
A day earlier, London-traded Brent futures sank to $42.23, the lowest level since March 2009, before ending at $42.69, down $2.77, or 6.09%.
Global oil production is outpacing demand following a boom in U.S. shale oil production and after a decision by the Organization of Petroleum Exporting Countries last year not to cut production.