Oil Prices Shoot up on Drawdown

Oil prices rose over $2 on Wednesday after industry data showed a larger-than-expected drawdown in U.S. crude inventories and on expectations demand will rise as vaccination roll-outs widen.

Brent oil rallied $2.14, or 3%, to $75.75 U.S. a barrel, while U.S. West Texas Intermediate (WTI) crude climbed $2.28, or 3.2%, to $72.74 a barrel.

Brent hit its highest levels since late July and WTI since early August.

U.S. crude oil, gasoline and distillate stocks fell last week, two market sources said, citing American Petroleum Institute figures, after Hurricane Ida shut numerous refineries and offshore drilling production.

Crude stocks fell by 5.4 million barrels for the week ending Sept. 10, compared to a forecast 3.5-million-barrel drop.

Tropical Storm Nicholas moved slowly through the Gulf Coast on Tuesday, leaving hundreds of thousands of homes and businesses without power, although Texas refineries ran normally.

Damage from the storm comes two weeks after Hurricane Ida knocked a significant amount of Gulf Coast refining capacity offline.

Oil prices also found support from the International Energy Agency, which said on Tuesday vaccine roll-outs would power a rebound, after a three-month slide in global oil demand due to the spread of the Delta coronavirus variant and renewed pandemic restrictions.