US oil inventories drop more than expected during latest week

US crude oil inventories fell by more than expected during the latest reference week, official data revealed, even as imports picked-up.

Commercial crude stockpiles in the States declined by 4.7m barrels over the week ending on 14 July, according to the Energy Information Administration, the US Department of Energy's statistical arm.

That was more than the 3.5m drop analysts had predicted.

Yet oil imports increased by 386,000 barrels a day during the week to an average rate of 8.0m barrels per day.

Meanwhile, gasoline inventories shrank by 4.4m b/d and those of distillates by another 2.1m b/d.

In parallel, refineries operated at 94.0% of capacity.

Domestic US oil production rose by 32,000 b/d to 9.397m b/d.

Commenting on the market's reaction to the data, Thomas Pugh at Capital Economics said: "The price of Brent increased on the release of today's data as investors focused on the sharp drops in inventories of both crude and gasoline. However, continued growth in US output and lacklustre gasoline demand capped the price rises. We expect further large draws in crude stocks over the rest of the year."

On the back of Wednesday's data, front month West Texas Intermediate crude oil futures were 1.33% higher to $49.50 a barrel on the ICE as of 1822 BST.