* U.S. crude stocks fall by more than expected - EIA
* Easing restrictions in UK, U.S. boost demand hopes
* U.S. exports, refining output surge in harbinger of more
demand
(New throughout, updates prices, market activity and analyst
comments; new byline, changes dateline, previous LONDON)
By Laila Kearney
NEW YORK, May 5 (Reuters) - Oil prices rose for a third day
on Wednesday as U.S. crude inventories fell more sharply than
expected, while pandemic-related restrictions in the United
States and parts of Europe eased, heralding an increase in fuel
demand for the summer months.
Brent crude LCOc1 was up 80 cents, or 1.2% higher at
$69.68 a barrel at 11:30 a.m. EDT (1630 GMT). U.S. West Texas
Intermediate (WTI) crude CLc1 rose 69 cents, or 1%, to $66.38
a barrel.
Both contracts hit their highest levels since mid-March in
intraday trade on Wednesday.
U.S. crude inventories fell by 8 million barrels in the week
to April 30 to 485.1 million barrels, exceeding expectations for
a 2.3 million-barrel drop, the Energy Information Administration
said. Exports rose to 4.1 million bpd, the most since March of
last year, and refining output was at its highest since that
month as well.
"Refinery runs are only likely to move higher from here, and
if we're going to get runs over 15 million bpd and exports over
3 million bpd we are going to consistently see draws going
forward," said Matt Smith, director of commodity research at
ClipperData.
The rise in oil prices to nearly two-month highs has been
supported by COVID-19 vaccine rollouts. In the United States,
more than 40% of U.S. adults have received at least one shot,
and more than half of adults in the United Kingdom. Euro zone business activity accelerated last month as the
bloc's dominant services industry shrugged off renewed lockdowns
and returned to growth.
"The partial lifting of mobility restrictions, the
expectation that tourism will return in the near future, and the
lure of the psychologically important $70 mark are all likely to
have contributed to the price rise," Commerzbank analyst Eugen
Weinberg said.
This has offset a drop in fuel demand in India, the world's
third-largest oil consumer, which is battling a surge in
COVID-19 infections.
Indian official data showed the country's oil imports in
March rose from the previous month, buoyed by an upturn in
economic activity, but is expected to drop again because of
renewed lockdowns in the world's third-largest crude importer.
"If we were to eventually see a national lockdown imposed,
this would likely hit sentiment," ING Economics analysts said.
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