Oil extended gains from the highest close in more than three years as U.S. industry data signaled crude stockpiles dropped an eighth week, Bloomberg reported.
Inventories fell by 11.2 million barrels last week according to the American Petroleum Institute. It could be the biggest decline for this time of the year since 1999. This is the result of extended cuts of OPEC and its allies. The OPEC-led group is facing the challenge of rising U.S. crude output, which is forecast by the EIA to expand above 10 million barrels a day as soon as next month and top 11 million in November 2019, claims the agency.
The market is expecting the tightening of global oil inventory. West Texas Intermediate was at $62.96 a barrel on Tuesday at the New York Mercantile Exchange, the highest close since December 2014. Total volume traded was about 16 percent above the 100-day average. Meanwhile, Brent for March settlement climbed as much as 44 cents, or 0.6 percent, to $69.26 a barrel on the London-based ICE Futures Europe exchange after advancing 1.5 percent on Tuesday to the highest since December 2014.
According to a Bloomberg survey before the EIA report, U. S. crude inventories dropped by 3.75 million barrels last week.