WTI oil futures extends gains after large draw in crude inventories

After a knee-jerk reaction lower, West Texas Intermediate oil quickly recovered and extended gains in North American trade on Thursday, after data showed that oil supplies in the U.S. registered a much larger-than-expected inventory draw.

The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 6.428 million barrels in the week ended May 26. Market analysts’ had expected a crude-stock draw of 2.517 million barrels, while the American Petroleum Institute late Wednesday reported a supply draw of 8.670 million barrels.

Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 0.747 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 509.9 million barrels as of last week, according to press release, which the EIA considered to be “in the upper half of the average range for this time of year”.

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