Oil Prices Rise After U.S. Crude Inventory Drawdown
Oil prices turned positive on Wednesday, erasing early losses, after the U.S. government reported a weekly crude inventory drawdown within expectations in a market depressed by worries about a glut in fuels supply.
U.S. gasoline futures briefly extended losses to hit a four-month low after a surprise build in supplies of the motor fuel despite rising demand over the summer period.
Brent crude futures' front-month contract were up 44 cents, or 1 percent, at $47.10 a barrel by 10:51 a.m. EDT (1451 GMT). It fell as much 76 cent earlier to an intraday low of $45.90.
The front-month August contract in U.S. crude's West Texas Intermediate (WTI) futures was down 80 cents, or 1.8 percent, at $43.85 a barrel by 9:18 a.m. EDT (1318 GMT).
The August contract, which will expire after Wednesday's settlement, earlier hit a two-month low of $43.69. That was the lowest for a WTI front-month since May 10. It also was below the 100-day moving average of $43.85 for WTI.
Crude inventories fell by 2.3 million barrels in the week to July 14, the U.S. Energy Information Administration reported, compared with analysts' expectations for a decrease of 2.1 million barrels.
"While in line with expectations, the drawdown is large enough to provide support, and refiner demand for crude remains elevated," said John Kilduff, partner at New York energy hedge fund Again Capital.
(By Barani Krishnan, Additional reporting by Karolin Schaps in LONDON)
