U.S. crude oil inventories decreased last week, the Energy Information Administration said in its weekly report on Wednesday.
That was compared to forecasts for a stockpile draw of 2.4 million barrels, after a gain of 0.007 million barrels in the previous week.
The EIA report also showed that gasoline inventories rose by 8.07 million barrels, compared to expectations for a build of 3.39 million barrels, while distillate stockpiles increased by 10.61 million barrels, compared to forecasts for a gain of 1.89 million.
Oil prices pared gains after the bearish data.
U.S. crude prices gained 2.05% to $50.80 a barrel by 10:35 AM ET (14:35 GMT), compared to $51.47 prior to the publication.
London-traded Brent crude futures rose 1.86% to $59.81 a barrel, compared to $60.45 ahead of the data.
Crude prices had been posting strong gains of around 3% prior to the release as positive news flow from three days of trade negotiations between the U.S. and China increased optimism that the world’s two largest economies would eventually reach an agreement, reducing risk of a broader negative impact on the global economy.
“Crude continues to extend gains as early reports from Beijing regarding trade negotiations are fueling optimism around successful trade talks between the U.S. and China,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
“After a dreadful December for risk markets, crude oil continues to catch a positive vibe,” Innes said.
Oil prices have also been receiving support from supply cuts started at the end of 2018 by a group of producers around the Organization of the Petroleum Exporting Countries (OPEC) as well as non-OPEC member Russia.
The OPEC-led cuts are aimed at reining in an emerging supply overhang, in part because U.S. crude oil output surged by around 2 million barrels per day (bpd) in 2018, to a record 11.7 million bpd./investing.com