Oil rebounds on surprise drop in crude stockpiles

Oil prices rebounded on Wednesday in Asia as data from the American Petroleum Institute showed US crude stockpiles unexpectedly dropped last week.

US Crude Oil WTI Futures rose 1.1% to $54.23 by 12:49 AM ET (02:49 GMT). International Brent Oil Futures gained 0.8% to $59.34.

The API said crude inventories dropped by 5.9 million for the week ended Sept. 27, against expectations for an increase of 1.6 million barrels.

Analysts expect that the Energy Information Administration will report a build of 1.57 million barrels when it issues numbers tomorrow morning. The EIA numbers are due at 10:30 AM ET (14:30 GMT).

Prior to today’s gains, oil prices have been down for six straight trading sessions, losing 9% in that stretch.

Earlier this week, data from the Institute of Supply Management showed manufacturing PMI posted its lowest reading in 10 years, sending stocks and oil prices down.

“Brent and WTI have erased those (Tuesday) losses in early trade respectively,” Jeffrey Halley, a senior market analyst at OANDA in Singapore said in a Reuters report, noting that the trading volume is low because of regional holidays.

“We would expect the rallies to quickly run out of steam as we approach $61.00 and $ 55.00 a barrel,” he added.