Investing.com - A larger-than-expected drawdown in U.S. oil stockpiles added to bullish sentiment and kept prices higher midmorning Thursday.
Oil inventories declined by 4.77 million barrels last week, the Energy Information Administration reported. Analysts predicted that inventories fell by about 2.49 million barrels for the week ended August 30, according to forecasts compiled by Investing.com.
WTI Futures climbed 2.4% to $57.62 at 11:43 AM ET (15:43 GMT). It was trading around $57 just before the release at 11 AM ET.
Brent, the global benchmark for oil, rose 2.7% to $62.31.
Gasoline inventories fell by 2.4 million last week, compared with expectations for a drop of about 1.52 million barrels.
Distillate stockpiles, which include heating oil, posted a surprise drop of 2.54 million. Analysts were predicting a rise of about 0.48 million barrels.
“These are all round positive numbers that should please oil bulls,” Investing.com analyst Barani Krishnan said. “The last hurrah before Labor Day for crude draws seems to have come indeed, at nearly 5 million barrels, or double that of the decline expected. And you have a near-2.5 million-barrel drop in both the fuels category, with distillates being the runaway since the expectations there were for a build.”
But the draws “occurred on the back of imports rising back above the weekly bellwether of 6 million bpd,” Krishnan added. “And you still have exports at a sterling 3 million bpd, squeezing another draw out of Cushing. Production remains near record highs at 12,.4 million bpd, though.”
Oil prices were climbing before the release of the inventory data, with bulls encouraged by the U.S. and China agreeing to more trade talks in October.
The trade battles between the two top economies, and the uncertainty about the impact on global oil demand, has been pressuring oil prices.
The talks were agreed to over the phone, the Chinese Commerce Ministry said, which was confirmed by a spokesman for the U.S. Trade Representative's office. No terms of the talks were given.
Looking ahead, sentiment will “depend on how the U.S.-China rhetoric fares in coming days,” Krishnan added. “Despite today’s bullish news of talks resuming in October, if recent trends in oil are any guide, be prepared for more volatility ahead.”