Oil prices rose on Wednesday as investors waited for decisions from major exporters on whether to extend production cuts and after government data showed a larger-than-expected drop in U.S crude inventories.
Benchmark Brent crude oil was up 32 cents a barrel at $54.47 U.S. by mid-morning Wednesday, while U.S. light crude oil rose 20 cents to $51.67 U.S.
Meanwhile, the U.S. Energy Information Administration reported that commercial crude stockpiles stateside fell by 4.4 million barrels to a total of 516.3 million barrels in the week through May 19 as refineries hiked output.
Late Tuesday, data from industry group American Petroleum Institute had showed crude inventories fell by 1.5 million barrels to 521.9 million barrels last week, compared with analysts' expectations for a decrease of 2.4 million barrels.
Gasoline stocks fell by 787,000 barrels, compared with analysts' expectations for a 1.2 million barrels drop. Moreover, EIA reported distillate stockpiles, which include diesel and heating oil, declined by 485,000 barrels, versus expectations for a 743,000 barrels decrease.
Experts noted that both crude benchmarks have gained more than 10%from their May lows below $50.00 U.S. a barrel, rebounding on a consensus that the Organization of the Petroleum Exporting Countries (OPEC) and other producers will maintain strict limits on oil production in an attempt to drain a global oversupply.
OPEC has promised to cut supplies by 1.8 million barrels per day (bpd) until June and is expected on Thursday to decide to prolong that cut to March 2018.
