Investing.com - Oil prices bounced higher on Wednesday, after data from the U.S. Energy Information Administration showed that domestic crude stockpiles dropped far more than expected last week, marking a second consecutive week of declines.
U.S. West Texas Intermediate (WTI) crude futures gained 21 cents, or around 0.4%, to $50.62 a barrel by 10:35 a.m. ET (14:35GMT). Prices were at around $50.27 prior to the release of the inventory data.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., rose 12 cents, or about 0.2%, to $56.10 a barrel, after hitting a two-week low of $55.39 earlier in the session.
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 6.023 million barrels in the week ended September 29.
Market analysts' expected a crude-stock decline of around 756,000 barrels, while the American Petroleum Institute on Tuesday reported a supply drop of 4.0 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 1.5 million barrels last week, the EIA said.
However, the report also showed that gasoline inventories increased by 1.644 million barrels, compared to expectations for a 1.088 million barrel rise. For distillate inventories including diesel, the EIA reported a fall of 2.606 million barrels.
Oil prices were under pressure in recent sessions as a rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices notch their biggest third-quarter gain in 13 years.
In May, OPEC and non-OPEC members led by Russia agreed to extend production cuts of 1.8 million barrels per day for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.
However, prices have pulled back around 5% so far this month amid concern that U.S. producers will increase output and possibly ramp up even more quickly to take advantage of recently higher prices.