Oil Futures Settle Higher After Data Shows Large Drop In Crude Stockpile

Crude oil prices climbed higher on Wednesday after data showed a big drop in U.S. crude inventories in the week ended August 25.

The dollar’s continued weakness, and the impact of Hurricane Idalia on operations in oil fields along Florida’s Gulf Coast raised supply concerns and contributed as well to the uptick in oil prices.

The dollar shed ground against other major currencies after data showing a slowdown in U.S. private sector employment growth, and a drop in second-quarter GDP helped ease concerns about the outlook for interest rates.

West Texas Intermediate Crude oil futures for October ended higher by $0.47 or about 0.6% at $81.63 a barrel, a two-week closing high.

Brent crude futures were up $0.34 or o.4% at $85.27 a barrel a little while ago.

Data from Energy Information Administration (EIA) showed crude inventories in the U.S. dropped by 10.584 million barrels last week, after a 6.135 million barrels decline a week earlier.

Gasoline inventory declined by 0.214 million barrels last week, much less than an expected drop of 0.933 million barrels, while distillate stockpiles increased by 1.235 million barrels in the week.

Data from the American Petroleum Institute, released late Tuesday, showed that U.S. crude stocks plunged by 11.486 million barrels during the week ended Aug 25, suggesting healthy demand leading up to the Labour Day holiday that usually marks peak summer demand.

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