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Oil Futures Settle Sharply Higher After Data Shows Drop In Inventories

Crude oil prices rose sharply on Wednesday, lifting the most active crude futures contracts to a near 7-week closing high, after data showed a larger than expected drop in U.S. crude inventories last week.

Reports saying that about 30% of oil production and 40% of natural-gas production in the Gulf still remains shut due to the impact of Hurricane Ida.

West Texas Intermediate Crude oil futures for October ended up by $2.15 or about 3.1% at $72.61 a barrel, the highest settlement since July 30.

Brent crude futures moved up $1.86 or 2.5% to $75.46 a barrel.

The International Energy Agency (IEA) said on Tuesday that vaccine roll-outs would trigger a rebound.

Data from U.S. Energy Information Administration (EIA) showed U.S. crude stockpiles dropped by 6.42 million barrels last week to $417.4 million barrels. The drop in the week was much larger than an estimate declined of $3.5 million barrels.

Distillate stockpiles, which include diesel and heating oil, fell by 1.688 million barrels in the week, up from a draw of 1.612 million barrels, the EIA data showed.

Meanwhile, gasoline inventories declined by 1.848 million barrels last week, compared with expectations for a draw of 1.957 million barrels.

Data from the American Petroleum Institute (API) on Tuesday showed that crude oil inventories fell 5.44 million barrels last week.

The material has been provided by InstaForex Company – www.instaforex.com