US crude sets 2-year record

Oil prices rose further on Wednesday, with the U.S. benchmark surging to its best level since July 2015 amid speculation weekly supply data due later in the day will show a large drop in U.S. crude inventories.

The U.S. Energy Information Administration will release its official weekly oil supplies report for the week ended Nov. 17 at 10:30AM ET (1530GMT).

After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 6.4 million barrels last week. That compared with analysts’ expectations for a decline of around 2.1 million barrels.

The API report also showed a gain of 869,000 barrels in gasoline stocks, while distillate stocks fell by 1.7 million barrels.

There are often sharp divergences between the API estimates and the official figures from EIA.

U.S. West Texas Intermediate (WTI) crude futures jumped $1.08, or about 1.9%, to $57.88 a barrel by 3:20AM ET (0820GMT). It touched its highest level since July 2015 at $57.98 earlier in the session. Trading was thinning out ahead of Thursday’s Thanksgiving holiday in the U.S., according to market participants.

Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., rose 64 cents, or around 1.1%, to $63.21 a barrel.

Oil prices ended higher on Tuesday amid expectations that oil producing countries will agree to extend an output cut at their meeting at the end of this month.

The Organization of the Petroleum Exporting Countries (OPEC), together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year in a bid to end a global supply overhang and prop up prices.

The deal to curb output is due to expire in March 2018, but OPEC will meet on Nov. 30 to discuss the outlook for the policy.

In other energy trading, gasoline futures inched up 1.4 cents, or 0.8%, to $1.776 a gallon, while heating oil gained 1.3 cents to $1.949 a gallon.

Natural gas futures dropped 1.1 cents, or 0.4%, to $3.006 per million British thermal units, as traders looked ahead to weekly storage data due later in the global day. It comes out one day ahead of its normal release time due to the Thanksgiving holiday.