Futures Movers: Oil prices edge up as U.S. crude supplies mark first weekly decline in 3 weeks

Oil futures headed higher Wednesday, with prices advancing after a report on U.S. inventories showed a sizable reduction in supplies.

West Texas Intermediate crude for October WTI contract CLV19, +0.73% gained 75 cents, or 1.3%, to $56.86 a barrel on the New York Mercantile Exchange, while the October contract for global benchmark Brent crude BRNV19, +1.50%  rose $1.01, or 1.7%, to $61.04 a barrel on ICE Futures Europe, with prices holding above $60.

The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 3.5 million barrels for the week ended Aug. 16, according to sources.

The API showed a stockpile decline of 403,000 barrels in gasoline, while distillate supplies rose by 1.8 million barrels. Inventory data from the Energy Information Administration will be released Wednesday at 10:30 a.m. Eastern Time, with that data expected to show crude inventories down by 3.1 million barrels last week, following two consecutive weekly increases, according to a survey of analysts conducted by S&P Global Platts. The survey also forecast weekly supply declines of 1.6 million barrels for gasoline and 200,000 barrels for distillates.

“The strong week for oil markets has continued with prices reaching $60 on Wednesday, something that seemed unlikely just a couple of weeks ago,” Mihir Kapadia, the CEO of Sun Global Investments, a Dubai-Mumbai based wealth manager said in a Wednesday research note.

Kapadia said that commodity investors will be keenly watching signs from the Federal Reserve’s minutes to gauge monetary-policy plans, which could prove a crucial driver for crude-oil sentiment.

“Markets will be looking for guidance as to the Fed’s likely next move on interest rates. It is likely that the Fed will leave room to cut interest rates further as the global economy, demand and trade dispute continue to weigh heavily. This sentiment will act as a headwind for Oil prices,” he wrote.

An account of the Federal Open Market Committee’s July 30-31 gathering is slated to be released at 2 p.m. Eastern.

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