Oil prices rose for the second consecutive day on Wednesday after U.S. government data showed domestic crude inventories fell to their lowest since February 2015, easing worries about oversupply that have weighed on markets in recent weeks.
Brent crude futures rose 49 cents to settle at $73.93 a barrel, a 0.67 percent gain.
U.S. West Texas Intermediate (WTI) crude futures rose 78 cents to settle at $69.30 a barrel, a 1.14 percent gain.
U.S. crude inventories fell 6.1 million barrels in the week to July 20, data from the U.S. Energy Information Administration showed, to 404.9 million barrels, their lowest since February 2015. Analysts had expected a decrease of 2.3 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, EIA said, their lowest since November 2014.
Gasoline stocks fell 2.3 million barrels, EIA data showed, compared with analysts’ expectations in a Reuters poll for a 713,000-barrel drop. Meanwhile, U.S. Midwest gasoline stockpiles fell to their lowest seasonally since 2015.
“Stronger product demand rounds out a supportive report, encouraging a decent draw to gasoline stocks,” said Matt Smith, director of commodities research at ClipperData.
However, price gains were limited after the release of the data because a majority of the crude stock draw was in the West Coast region, also known as PADD 5. Stocks in the area fell their most since December 2011.
The market usually discounts large inventory drawdowns when they are concentrated in the West Coast, said John Kilduff, a partner at Again Capital Management in New York, because limited connectivity from the West Coast to the rest means it is “just not as critical to the overall inventory situation.”
Prices were also supported by an International Monetary Fund report about skyrocketing inflation in Venezuela, suggesting a limited ability for that country to boost oil output, said Stephen Innes, a trader at brokerage OANDA.
“Venezuelan oil production has already plummeted to a new 30-year low of 1.5 million barrels a day in June,” he said.
Oil prices have come under pressure this month as a trade dispute between the United States and China, as well as other major economic blocs, has raised the possibility of slower economic growth and weaker energy demand.
Reports that China will increase infrastructure spending reduced some concerns that U.S.-China trade tensions will dent Chinese demand for oil.