Oil gains on surprise drawdown in US crude inventories

TOKYO: Oil prices rose on Thursday, holding onto a late-session rally the previous day, buoyed by the US government data showing a surprise drawdown in crude stockpiles.

US West Texas Intermediate crude for May delivery was up 19 cents, or 0.3 per cent, at $ 63.56 a barrel by 0140 GMT after settling down 14 cents.

Front-month London Brent crude for June delivery was up 20 cents, or 0.3 per cent, at $ 68.22, having ended down 10 cents.

Before the rebound late on Wednesday, after the release of the Energy Information Administration (EIA) inventory data, WTI and Brent had hit two-week lows after China proposed a broad range of tariffs on US exports, feeding fears of a trade war.

US crude inventories fell by 4.6 million barrels last week, compared with analysts’ expectations for an increase of 246,000 barrels, EIA data showed on Wednesday.

Gasoline stocks fell by 1.1 million barrels, compared with analysts’ expectations for a 1.3 million barrels drop. Distillate stockpiles, which include diesel and heating oil, rose by 537,000 barrels, versus expectations for a 1.1 million barrels drop.

Oil has also received support from a turnaround in the US stock market and a Reuters survey showing OPEC oil output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan output.

Shanghai September crude futures were untraded due to a public holiday in China, after falling 0.8 per cent on Wednesday. Shanghai trading will resume on Monday.