Oil jumps on steep drop in U.S. crude stocks

By Sonali Paul
MELBOURNE, May 5 (Reuters) - Oil prices rose nearly 1% on
Wednesday, extending overnight gains, after industry data
estimated U.S. crude stockpiles fell much more than expected
last week reinforcing bullish views on fuel demand in the
world's largest economy.
U.S. West Texas Intermediate (WTI) crude CLc1 futures
leapt 60 cents, or 0.9%, to $66.29 a barrel at 0130 GMT, after
climbing to $66.45, its highest since March 8.
Brent crude LCOc1 futures jumped 58 cents, or 0.8%, to
$69.46 barrel after touching a more than seven-week high of
$69.64.
Both benchmark contracts rose nearly 2% on Tuesday ahead of
data from the American Petroleum Institute industry group.
API figures showed crude stocks fell by 7.7 million barrels
in the week ended April 30, according to two market sources.
That was more than triple the drawdown expected by analysts
polled by Reuters. API/S "This should provide some further immediate upside momentum
for the market," ING Economics analysts said in a note.
Traders are awaiting data from the U.S. Energy Information
Administration due at 10:30 a.m. EDT (1430 GMT) on Wednesday to
see if official data shows such a large drawdown.
"If confirmed by the EIA, that would mark the largest weekly
fall in the official data since late January," Commonwealth Bank
analyst Vivek Dhar said in a note.
The rise in oil prices to nearly two-month highs has been
supported by COVID-19 vaccine rollouts in the United States and
Europe paving the way for pandemic lockdowns to be lifted and
air travel to pick up.
So far that has more than offset a drop in fuel demand in
India, which is battling a surge in infections.
"However, if we were to eventually see a national lockdown
imposed, this would likely hit sentiment," ING analysts said of
the situation in India.