Mubasher: Oil prices climbed on Wednesday after industry figures indicating a more-than-expected drawdown in US crude stockpiles allayed worries about oversupply, at a time when American producers evacuated rigs in the Gulf of Mexico bracing for a storm, Reuters reported.

By 7:55 am GMT, US Nymex crude futures climbed by 1.64% to $58.78 per barrel (pb), while global benchmark Brent futures rose by 1.32% to $65.01 pb.

Both contracts were supported this year as the Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated producers including Russia tightened their production to shore up prices.

However, protracted trade rows have triggered concerns about weaker demand, and investors kept a lookout for indicators that fast-growing US output is being consumed.

The American Petroleum Institute (API) stated that US oil inventories dropped by 8.1 million barrels to 461.4 million in the week ending 5 July, compared forecasts of a decline of 3.1 million barrels.

Official report from the Energy Information Administration (EIA) is due later in the day.

“Prices are finely balanced right now as investors await fresh stimulus [which] could come in the form of a sharp change in US crude oil inventories” FOREX.com technical analyst Fawad Razaqzada was quoted by Reuters.

Moreover, key producers began evacuating rigs in the Gulf of Mexico, shutting in production as a tropical disturbance may turn into a storm later in the day or next.

That said, a downturn in global economy indicated by the latest manufacturing reports “is likely to impact demand for commodities, although stimulus measures may in some cases support commodity demand,” a note by NAB was quoted by Reuters.

Adding to that, US crude production is expected to hit a record of 12.36 million barrels per day (bpd) in 2019, from last year’s peak of 10.96 million bpd, the EIA’s Short Term Energy Outlook said.

OPEC members and their allies agreed last week on rolling over their supply-cutting agreement until March 2020.