Investing.com - Crude oil prices settled higher as data showing a larger-than-expected drop in U.S. crude supplies offset fears of a slowdown in global demand growth.
On the New York Mercantile Exchange crude futures for June delivery rose 18 cents to settle at $71.49 a barrel, while on London's Intercontinental Exchange, Brent rose 0.80% to trade at $79.06 a barrel.
Inventories of U.S. crude fell by 1.404 million barrels for the week ended May 11, beating expectations for a draw of just 0.763 million barrels, according to data from the Energy Information Administration (EIA). This was the second-straight weekly decline in crude inventories.
The large draw in crude supplies came as product inventories fell after refinery activity rose 0.7% last week, topping expectations for a 0.4% rise, according to the EIA.
Gasoline inventories – one of the products that crude is refined into – fell by 3.790 million barrels, beating expectations for a fall of 1.421 million barrels, while supplies of distillate – the class of fuels that includes diesel and heating oil – fell by 0.092 million barrels, missing expectations for a draw of 2.155 million barrels.
The bullish inventory report helped to ease investor concerns about a possible slowdown in the rebalancing of oil markets after the International Energy Agency (IEA) said higher oil prices could hurt oil demand growth.
The IEA on Wednesday lowered its forecast for global oil demand growth to 1.4 million barrels per day for 2018, from a previous estimate of 1.5 million barrels.
The energy watchdog also said focus on oil markets has shifted from fundamentals to geopolitics after the US pulled out of the Iran nuclear deal. The impact on global crude supplies of pending U.S. sanctions on Iran “is unknown as this point,” the IEA said.
U.S. sanctions against Iranian crude oil customers are expected to commence on Nov. 5. But some countries could be granted relief on sanctions should they make significant cuts to their imports of Iranian oil over the next six months, the Treasury Department said last week.