TOKYO (Reuters) – Oil prices extended gains by more than 1.5 percent on Thursday after industry data showed what might be the largest weekly drawdown in crude stocks in over three decades.
U.S. crude stocks surprisingly plunged by 12.1 million barrels last week, data from the American Petroleum Institute showed after market settlement on Wednesday, compared with expectations for an increase of around 200,000 barrels.
If official data released from the U.S. government later on Thursday confirms the draw, it would be the largest one-week decline since April 1985.
London Brent crude for November delivery had climbed 66 cents to $48.64 a barrel by 0641 GMT, after settling up 72 cents on Wednesday.
NYMEX crude for October delivery was up 76 cents at $46.26, having ended the previous session up 67 cents.
U.S. crude stocks have been at record highs in the last two years, thanks in part to the shale oil boom that boosted output. Some analysts said Tropical Storm Hermine, which threatened the Gulf Coast refining region late last week before moving to the U.S. East Coast, may have skewed the figures.
“I’m surprised at the big draw,” said Tomomichi Akuta, senior economist at Mitsubishi UFJ Research and Consulting in Tokyo. “Despite a possible temporary effect (from the tropical storm), it raised concerns of supply/demand tightening significantly.”
Analysts said a large decline in U.S. gasoline stocks also supported oil.
Gasoline stocks fell 2.3 million barrels, compared with expectations for a 171,000-barrel decline, the API data showed. Distillate stockpiles, which include diesel and heating oil, rose 944,000 barrels, compared with expectations for a 684,000-barrel gain.
Oil was also buoyed by robust Chinese trade data, which showed its crude imports in August surged by nearly a quarter from a year ago to the second-highest amount ever, driven by independent refiners as they rushed to cash in on low oil prices before their import quotas expire in December.
Oil hit a one-week high on Monday after Russia and Saudi Arabia agreed to cooperate on stabilising the oil market. Prices have since fallen due to uncertainty over a possible deal by producer nations to freeze output, particularly after a meeting in Doha in April ended without such an agreement.
The Organization of the Petroleum Exporting Countries and non-OPEC producers such as Russia are expected to discuss the issue at informal talks in Algeria from Sept. 26-28.