Investing.com - Oil prices continued their march higher in European trade on Wednesday, extending gains into a third session as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.
The U.S. West Texas Intermediate crude September contract was at $48.48 a barrel by 3:20AM ET (0720GMT), up 59 cents, or around 1.2%. It rose to its strongest level since June 1 at $48.66 in the prior session.
Elsewhere, Brent oil for September delivery on the ICE Futures Exchange in London tacked on 50 cents to $50.70 a barrel. It touched an eight-week high of $50.91 a day earlier.
The U.S. Energy Information Administration will release its official weekly oil supplies report at 10:30AM ET (1430GMT).
Analysts expect crude oil inventories dropped by around 2.6 million barrels at the end of last week, while gasoline supplies are seen decreasing by 614,000 barrels and distillates are forecast to fall about 453,000 barrels.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by a whopping 10.2 million barrels in the week ended July 21. The API report also showed a gain of 1.9 million barrels in gasoline stocks, while distillate stocks fell by 111,000 barrels.
There are often sharp divergences between the API estimates and the official figures from EIA.
Oil prices scored their biggest one-day rally of 2017 on Tuesday as fresh pledges from Saudi Arabia and Nigeria at the start of the week to respectively pull back on exports and output boosted sentiment.
At an Organization of the Petroleum Exporting Countries meeting on Monday, Saudi Arabia announced it would cut August exports to 6.6 million barrels a day, which would be a million less than a year earlier.
In addition, Nigeria, which has been exempt from this year’s OPEC-led production-cut deal, pledged to cap output once it reaches a level of 1.8 million barrels a day. The cartel’s latest data put the country’s output at around 1.7 million.
In May, OPEC and some non-OPEC producers, such as Russia, extended an agreement to slash 1.8 million barrels per day in supply until March 2018.
So far, it has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya and Nigeria, as well as a relentless increase in U.S. shale production.
Elsewhere on Nymex, gasoline futures for August was down half a cent to $1.599 a gallon, while August heating oil added 0.7 cents to $1.576 a gallon.
Natural gas futures for September delivery ticked up 1.5 cents to $2.946 per million British thermal units.