2021.06.2319:13:00UTC+00Oil Futures Settle Modestly Higher As Crude Inventories Drop

Oil prices rose on Wednesday after official data showed a larger than expected decline in U.S. crude inventories in the week ended June 18.

However, possibility of increased output from major oil producers in the coming months limited oil's surge.

West Texas Intermediate crude oil futures for August ended up by $0.23 or about 0.3% at $73.08 a barrel, the highest level since October 2018.

Brent crude futures gained $0.38 or 0.5% to $75.19 a barrel.

Data released by Energy Information Administration (EIA) showed crude inventories in the U.S. fell by 7.614 million barrels last week, declining for a fifth straight week. Analysts had expected crude inventories to drop by about 3.9 million barrels in the week.

Distillate stockpiles rose by 1.75 million barrels last week, much more than an expected increase of about 1.08 million barrels, while gasoline inventories dropped by 2.93 million barrels, beating expectations for a build of about 833,000 barrels.

The American Petroleum Institute (API) industry group reported late Tuesday that U.S. crude stocks fell by 7.2 million barrels for the week ending June 18, compared with expectations for a much smaller draw of 3.9 million barrels.

The API reported a build in gasoline stockpiles of 959,000 barrels for the week, while distillate inventories climbed by 992,000 barrels.

The focus now is on the upcoming meeting of the OPEC+ (the Organization of the petroleum Exporting Countries and its allies), scheduled to take place on July 1. OPEC+ is discussing a gradual increase in supply from August, but no decision has been made yet on the exact volumes, two OPEC+ sources were quoted as saying on Tuesday.

According to reports, Russia has already signaled that it would like to increase crude production. Saudi Arabia is also reportedly keen on increasing production.