Oil prices rallied nearly three percent to settle near 74 U.S. dollars a barrel on Wednesday on upbeat economic data and a drop in gas and distillate fuel inventories.
The U.S. Energy Department Energy Information Administration ( EIA) reported that U.S. crude stockpiles rose by 3.4 million barrels in the week ended on Aug. 27, larger than average forecast. Total crude inventories are already at the highest since at least 1990, according to government data.
But investors focused more on the drop in gasoline and distillate fuels. The EIA report showed that gasoline inventories declined by 212,000 barrels, slightly more than expected, and distillates supplies, which include diesel and heating oil, fell by 739,000 barrels, against forecasts for an increase.
Oil prices gained further after data suggested that U.S. manufacturing is on track of expansion. The Institute of Supply Management said its manufacturing index unexpectedly rose to 56.3 compared with expectations of a drop to 52.8.
Meanwhile, data showed that China’s manufacturing activities picked up after three months of decline, and Australia’s economy grew in the second quarter at its fastest pace in three years, boosting market confidence in global recovery.
Light, sweet crude for October delivery gained 1.99 dollars, or 2.7 percent, to settle at 73.91 dollars a barrel on the New York Mercantile Exchange.
Brent crude for October delivery rallied 1.75 dollars to 76.39 dollars a barrel on the International Futures Exchange in London.
