Crude oil futures extended gains on Wednesday after data showed that US crude stockpiles declined sharply last week. Benchmark brent crude was trading 0.49% higher while US west texas intermediate gained 0.62%.
The drawdown in American crude inventories of 11.5 million barrels was larger than expected and pointed to solid fuel demand. Hovering geopolitical uncertainties over a looming hurricane in the Gulf of Mexico, a major oil producing region, also kept investors on edge.
Meanwhile, OPEC leader Saudi Arabia is seen extending its voluntary output cut through October which would continue tightening supply. Refining sources surveyed by Reuters anticipated that Riyadh would raise its October crude selling prices to Asia, its largest customer, to yearly highs.
However, capping oil's upside was persisting demand worries from China amid its mixed economic picture. The military takeover in Gabon could also impact global supply as the country exports sizable volumes to Asia.
Overall, buoyant drawdowns in US stockpiles and risks to Gulf of Mexico production from the hurricane supported crude futures. But demand concerns in China and wider economic uncertainties checked steeper price rallies.
