Investing.com - Oil prices rallied to a four-week high in European trading on Wednesday, extending gains into a second session after data overnight showed a larger-than-expected drop in U.S. crude supplies.
The U.S. West Texas Intermediate crude May contract reached a session peak of $51.49 a barrel, the highest since March 8. It was last at $51.39 by 3:33AM ET (07:33GMT), up 36 cents, or around 0.7%, after rising 79 cents on Tuesday.
Elsewhere, Brent oil for June delivery on the ICE Futures Exchange in London tacked on 38 cents to $54.55 a barrel. The global benchmark touched its highest since March 8 at $54.66 earlier. It jumped $1.05 in the prior session.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 1.83 million barrels in the week ended March 31.
The API report also showed a drop of 2.56 million barrels in gasoline stocks, while distillate stocks declined 2.09 million barrels.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (14:30GMT) Wednesday. If the draw is confirmed, it would be the first decline after two consecutive builds.
Oil has been well-supported in recent sessions amid increasing confidence that output cuts by major global oil producers are beginning to rebalance the market.
OPEC agreed in November last year to curb its output by about 1.2 million barrels per day between January and June. Russia and 10 other non-OPEC producers have agreed to jointly cut by an additional 600,000 barrels per day.
In total, they agreed to reduce output by 1.8 million barrels per day to 32.5 million for the first six months of the year.
A joint committee of ministers from OPEC and non-OPEC oil producers will meet in late April to present its recommendation on the fate of the pact. A final decision on whether or not to extend the deal beyond June will be taken by the oil cartel on May 25.
Elsewhere on Nymex, gasoline futures for May added 0.7 cents, or 0.4%, to $1.731 a gallon, while May heating oil rose 1.1 cents to $1.604 a gallon.
Natural gas futures for May delivery dipped 1.1 cents to $3.281 per million British thermal units.