LONDON—Oil prices climbed more than $1 on Wednesday, extending overnight gains after industry data showed U.S. crude stocks fell more than expected last week in the wake of two hurricanes, highlighting tight supply as demand improves.
Prices were also supported as some OPEC members struggle to raise output and by a general sense of energy market shortages amid a power and gas crisis in Europe.
U.S. West Texas Intermediate (WTI) crude futures rose $1.07, or 1.5 percent, to $71.56 a barrel by 0911 GMT, adding to a 35- cent gain from Tuesday.
Brent crude futures climbed $0.95, or 1.3 percent, to $75.31 a barrel, after gaining 44 cents on Tuesday.
The oil market’s focus turned to concerns of tight supply, after Monday’s pressure from broad market jitters over the possible default of Chinese property developer China Evergrande Group.
“Crude is supported by the API weekly report, which noted a bigger-than-expected decline in U.S. crude oil stocks,” said Ravindra Rao, vice president of commodities at Kotak Securities.
“Prices are still rangebound ahead of the EIA weekly report due later today and ahead of the U.S. Federal Reserve’s monetary policy decision … In the near term, crude may move with larger markets with focus on China and Fed policy.”
U.S. crude stocks fell by 6.1 million barrels for the week ended Sept. 17, market sources said, citing Tuesday’s figures from the American Petroleum Institute.
That was a much bigger than the expected decline. The market will be watching U.S. government data on Wednesday to confirm the drops.
“Given the variety of supportive factors in the energy space, notably sky-high natural gas prices … dips in prices right now are likely to be short-lived,” said Jeffrey Halley, an analyst at brokerage OANDA.
Global gas prices are expected to break records this winter.
By Dmitry Zhdannikov