Oil jumps after big U.S. crude stocks draw

Oil jumped Wednesday after an industry report showed a larger-than expected draw in U.S. crude stocks in the latest week.

U.S. crude was up 59 cents, or 1.31%, at $45.63 at 08:00 ET. Brent added 53 cents, or 1.21%, to $48.05.

The American Petroleum Institute Tuesday reported a fall in U.S. crude stocks of 8.1 million barrels to 495.6 million.

The Energy Information Administration is due later Wednesday to release the official inventories report.

The EIA is forecast to report a drop in crude stocks of 2.85 million barrels in the latest week.

Oil’s gains remain capped by ongoing supply concerns with major producers under growing pressure to beef up their output cuts.

OPEC and non-OPEC producers, including Russia, have agreed to curb output by 1.8 million barrels a day through to March.

Major OPEC producers are due to meet later this month in Russia to discuss the market situation.

Nigeria and Libya, which have been exempt from the OPEC-led cuts, may be invited to join the talks.

OPEC’s monthly report showed notable increases by both countries in June compared with May. Iraqi output also rose.

Overall OPEC output rose by 393,500 barrels per day to 32.611 million barrels.

OPEC left its forecast for world demand for this year unchanged while slightly lowering its forecast for supply.

U.S. drilling activity continues to advance, challenging the market’s ability to re-balance.