Investing.com - West Texas Intermediate oil futures pushed higher in North American trade on Wednesday, adding to gains after data showed that U.S. gasoline supplies fell sharply for the second straight week.
Crude oil for September delivery on the New York Mercantile Exchange tacked on 47 cents, or 1.1%, to trade at $43.24 a barrel by 14:35GMT, or 10:35AM ET. Prices were at around $42.92 prior to the release of the inventory data.
The U.S. Energy Information Administration said in its weekly report that gasoline inventories decreased by 2.8 million barrels in the week ended August 5, much more than the expected 1.0-million-barrel decline.
For distillate inventories including diesel, the EIA reported a surprise decline of 2.0 million barrels.
Gains were limited as the report also showed that crude oil inventories rose by 1.1 million barrels last week. Market analysts' expected a crude-stock decline of 1.0 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 2.1 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, rose by 1.163 million barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 523.6 million barrels as of last week, which the EIA considered to be “historically high levels for this time of year”.
WTI crude futures are nearly 18% lower from their 2016 highs above $50 a barrel scaled in early June, as signs of an ongoing recovery in U.S. drilling activity added to worries about a global glut of crude.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by seven to 381, the sixth consecutive weekly rise and the ninth increase in 10 weeks.
The EIA said Tuesday it expected a smaller decline of 700,000 barrels per day in U.S. crude oil production in 2016 than the 820,000 drop it forecast a month ago.
U.S. output is now expected to reach 8.31 million barrels per day in 2017, up from a previous forecast of 8.2 million barrels per day, due to the recent uptick in the number of rigs drilling for oil.
Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery inched up 46 cents, or 0.93%, to trade at $45.38 a barrel.
In its monthly market report published earlier, OPEC said that output from its own 14 members increased by 46,000 barrels a day to 33.11 million in July, as Saudi Arabia boosted its output to a record high.
The kingdom pumped 10.67 million barrels per day last month, a sign that OPEC's largest producer remained focused on market share rather than tackling a supply glut by curbing production.
The producer group upgraded its outlook for 2016 global oil demand growth, increasing it to 1.22 million barrels per day. For 2017, OPEC kept its forecast unchanged at 1.15 million barrels per day.
A day earlier, Brent prices lost 41 cents, or 0.9%, as market players remained skeptical that an upcoming meeting among major oil producers would result in any concrete actions to freeze output.
OPEC will hold an informal meeting on the sidelines of the International Energy Forum conference in Algeria next month to discuss setting new limits for oil production in an effort to stabilize the market.
However, experts were skeptical that the meeting will yield any action to reduce the global glut. An attempt to jointly freeze production levels earlier this year failed after Saudi Arabia backed out over Iran's refusal to take part of the initiative.
London-traded Brent futures are down almost 15% since peaking at $52.80 in early June, as prospects of increased exports from Middle Eastern and North African producers, such as Iraq, Nigeria and Libya, added to concerns that a glut of oil products will cut demand for crude by refiners.