2021.07.2910:10:00UTC+00Oil Extends Gains After Sharp Inventory Drop

Oil prices rose on Thursday to extend gains from the previous session after overnight data from the U.S. Energy Information Administration (EIA) showed U.S. crude inventories resumed a downward trend last week.

Benchmark Brent crude futures rose about half a percent to $74.23 a barrel in European trade, while U.S. crude futures were up 0.6 percent at $72.80.

The EIA report showed crude inventories in the U.S. fell by 4.089 million barrels last week, over a million barrels up from an expected drop of about 2.9 million barrels.

Gasoline inventories dropped by 2.253 million barrels last week, more than twice the expected draw, the data showed.

Distillate stockpiles, which include diesel and heating oil, fell by 3.088 million barrels, much more than an expected drop of 435,000 barrels.

The drawdown in crude inventories to their lowest level since January 2020 raised optimism that supplies will remain tight despite the production hikes set by OPEC+.

These stocks rose for the first time in nine weeks the previous week, prompting concerns that demand was peaking in the world's largest consumer.

Meanwhile, traders shrugged off separate data showing that India's crude oil imports dropped to their lowest level in eight months in June.

Crude oil imports dropped 7.8 percent from May as refiners cut down processing in the face of a tumultuous second wave of the coronavirus, data on the website of the Petroleum Planning and Analysis Cell (PPAC) showed.