U.S. oil prices extended gains on Wednesday after industry data showed a surprise decline in U.S. crude inventories.
WTI crude was up 35 cents, or 0.5 per cent, at $72.27 a barrel early on Wednesday, having settled up 14 cents.
Brent crude was up 36 cents, or 0.4 per cent, at $81.77 a barrel, after settling up 63 cents the session before. The global benchmark, which hit a more than two-week low late last week as equity markets dropped, is trading about $5 below a four-year high of $86.74 marked on Oct. 3.
U.S. crude inventories fell by 2.1 million barrels last week, compared with analyst expectations for a build of 2.2 million barrels, American Petroleum Institute data showed after Tuesday’s settlement.
Gasoline stocks dropped by 3.4 million barrels, compared with analyst expectations in a Reuters poll for a 1.1 million-barrel decline. Distillate fuel stockpiles, which include diesel and heating oil, declined by 246,000 barrels, compared with expectations for a 1.3 million-barrel drop, the API data showed.
U.S. President Donald Trump has urged the Organization of the Petroleum Exporting Countries to raise output to help cover a shortfall due to new U.S. sanctions on Iran.
The market has been supported by reports that Iranian crude exports may be falling faster than expected ahead of Nov. 4, the date sanctions on the commodity are due to start.
The market has also been supported amid growing U.S. tensions with top exporter Saudi Arabia over the disappearance of Saudi journalist Jamal Khashoggi.
Meanwhile, OPEC Secretary-General Mohammad Barkindo on Tuesday urged oil producing companies to increase capacities and invest more to meet future demand as spare oil capacity shrinks worldwide.
The Russian government is no longer capping oil output increases by local producers, one of the country’s top energy companies, Gazprom Neft, said on Tuesday, signaling that Moscow’s supply-restraint pact with OPEC has effectively expired for now.
OPEC and its allies including Russia agreed to reduce output by 1.8 million barrels per day (bpd) from the start of 2017 with Moscow pledging to cut some 300,000 bpd.
As oil prices hit $80 per barrel in recent months and with global oil inventories shrinking fast, Saudi Arabia and Russia agreed to ease restrictions although they never said the exact levels they would target.