Investing.com - Oil prices jumped higher on Wednesday in Asia after data showing a larger than expected decline in U.S. stockpiles underpinned a market already supported by concerns over heightened Middle East tensions.
U.S. WTI crude futures were up 2% at $58.96. International benchmark Brent crude gained 1.4% to $65.2.
Prices were boosted after the American Petroleum Institute (API) reported a larger-than-forecast fall in U.S. crude inventories last week.
U.S. crude stockpiles fell by 7.5 million barrels to 474.5 million, surpassing expectations for a decline of 2.5 million barrels, according to the API data. Crude stocks at U.S. delivery hub Cushing, Oklahoma, fell by 1.3 million barrels.
"Oil prices went ballistic after the API report," said Stephen Innes, managing partner at Vanguard Markets, in a Reuters report. "Oil prices have been squeezing higher on escalating tensions in the Middle East. But with late-day draws showing up in the API report, this is a strong signal for the energy market," Innes said.
Traders expect weekly data from the U.S. Energy Information Administration, due later in the day, will show a 2.5-million-barrel drop in crude stockpiles, almost matching the last decline of 3.1 million barrels.
Meanwhile, energy traders remained on the watch out for any indications that tensions between the United States and Iran could escalate into military conflict.
Meanwhile, Kremlin spokesman Dmitry Peskov said on Tuesday that Russian President Vladimir Putin will meet Saudi Crown Prince Mohammed Bin Salman at the G-20 summit this weekend.
It is expected the two will discuss whether and how to extend the current production cut agreement between the Organization of the Petroleum Exporting Countries (OPEC) and other producers.
OPEC and its allies will discuss the output policy for the rest of the year at a meeting next week.