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Oil prices extended their gains after a report showed US crude stockpiles fell by the biggest margin since December and were down for the fifth straight week.
Inventories of US crude fell by 5.25m barrels in the week ended May 5, according to the Energy Information Administration. That topped forecasts for a draw of 1.9m barrels. This was the largest streak of back-to-back declines in US oil stocks since September.
The larger-than-expected drop came alongside weaker imports, which averaged over 7.6m barrels per day last week, down by 644,000 barrels per day from the previous week. At 522.5m barrels, US crude oil inventories are near record levels.
Meanwhile, the report also showed that stocks at Cushing, Oklahoma decreased by 438,000 barrels, compared with expectations for a draw of 419,000 barrels.
Stockpiles of gasoline, one of the products that crude is refined into unexpectedly fell by 150,000 barrels, against expectations for a build of 65,400 barrels.
Following the release, West Texas Intermediate, the US crude marker, was up 2.5 per cent to $47.03 barrel, while Brent crude, the global oil benchmark, rose 2.4 per cent to $49.90 a barrel.
Despite expectations that Opec and Russia will extend their oil output cuts into the second half of the year, crude continues to trade below the $50 a barrel mark. Markets have grown anxious amid concerns that US production and the oil cartel’s exports are undercutting production curbs. Moreover, concerns about a slowing Chinese economy have also dampened oil sentiment.