Oil prices were up more than 1% on Wednesday after data showing a steep fall in U.S. crude stockpiles helped ease worries about weakening oil demand caused by the trade war between Washington and Beijing.
Brent crude LCOc1 futures gained $1.09, or 1.8%, at $60.60 a barrel by 1:27 p.m. EDT (1727 GMT). West Texas Intermediate crude CLc1 futures rose $1.02, or 1.9%, to $55.95 a barrel, as reported by Reuters.
U.S. crude oil inventories fell last week by 10 million barrels, compared with analysts' expectations for a decrease of 2.1 million barrels, as imports slowed, the Energy Information Administration said.
"The ongoing trend of narrowing net imports has yielded a massive draw to crude stocks, with imports dropping below 6 million barrels per day, and exports jumping above 3 million barrels per day," said Matt Smith, director of Commodity Research at ClipperData.
Gasoline stocks fell by 2.1 million barrels, compared with analysts' expectations in a Reuters poll for a 388,000-barrel drop.
"It was an incredibly bullish report, one of the more bullish we've had in a while, with draws across the board and of course the massive crude oil drop, which was generated by another drop in imports," said John Kilduff, a partner at Again Capital in New York. That draw down was likely due to a drop in Saudi exports to the U.S, Kilduff said.
A stronger U.S. dollar, which generally moves inversely with oil prices, limited gains in crude futures, Kilduff said.
Concerns about the impact of the U.S.-China tariffs war on demand also kept oil prices from rising more.
U.S. President Donald Trump said on Monday that he believed China was sincere about wanting to reach a trade deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through "calm" negotiations.
On Tuesday, however, concerns resurfaced after China's foreign ministry said it had not heard of any recent telephone call between the United States and China on trade, and that it hoped Washington could create conditions for talks.
Crude prices have fallen about a fifth from 2019 highs hit in April, partly because of worries that the trade war is hurting the global economy and could dent oil demand.
Morgan Stanley on Wednesday lowered its price outlook for the rest of the year for Brent to around $60 per barrel from $65 and for U.S. crude to $55 per barrel from $58 as it downgraded its demand growth forecast for this year and next.