Official U.S. crude oil inventory data released on Wednesday morning confirms a significant drop in stockpiles, showing a drawdown of 4.2 million barrels from the previous week.
"At 537.1 million barrels, U.S. crude oil inventories are at historically high levels for this time of year," the Energy Information Administration (EIA) said in its weekly status report.
On Tuesday, the API said that U.S. crude oil supplies had fallen by 5.1 million barrels for the week ending in May 20th, causing the largest inventory draw since December 2015.
Related: Oil Rally Pauses After Canada, Iran Up Production
Oil hit close to $50 per barrel overnight, riding high on preliminary inventory data that showed an over 5-billion-barrel dip in crude stockpiles and reaching a 7-month high.
West Texas Intermediate (WTI) was up 2.5 percent, to U.S.$49.27 per barrel in afternoon trading yesterday, hitting a point higher than anything seen since last October.
By early morning, WTI was quoted as high as U.S.$ 49.45, dipping down to U.S.$49.11, but holding firm ahead of anticipation that the EIA would confirm the API report.
The EIA also noted that total motor gasoline inventories increased by 2.0 million barrels last week, which is "well above the upper limit of the average range." Finished gasoline inventories remained unchanged, while distillate fuel inventories were down by 1.3 million barrels, but still above the average range for this time of year.
Related: China Moves Into U.S. Wind Sector
"U.S. crude oil refinery inputs averaged 16.3 million barrels per day during the week ending May 20, 2016, 92,000 barrels per day less than the previous week's average," the EIA noted, with refineries operating at 89.7 percent of their operable capacity last week.
"Gasoline production decreased last week, averaging about 9.9 million barrels per day. Distillate fuel production decreased last week, averaging about 4.7 million barrels per day," the report said.
By James Burgess of Oilprice.com
More Top Reads From Oilprice.com:
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also… More