NEW YORK: Oil prices recovered from two-month lows on Wednesday as markets reacted to a drop in crude inventories in the United States.
The US Department of Energy reported that crude stockpiles fell by 2.3 million barrels last week, offsetting a surprise rise in gasoline inventories during the peak demand season for American motor fuel.
US benchmark West Texas Intermediate for August delivery rose 29 cents to US$44.94 on the New York Mercantile Exchange.
Brent North Sea crude for delivery in September was up 51 cents at US$47.17 a barrel in London.
Earlier on Wednesday and ahead of the data, WTI had struck a 2.5-month low point at US$43.69 a barrel.
“We ve seen a little bit of a surprise in how much decline in oil there was,” said Bert Melek at TD Securities.
Before the US inventory report, prices had fallen on the renewed strength in the dollar – making the commodity more expensive for buyers holding weaker currencies.
US oil prices already hit two-month lows Tuesday after the International Monetary Fund lowered its global growth forecasts, citing the impact of Britain s vote to leave the European Union.
The IMF said it expects the world economy to expand 3.1 per cent this year, lower than it forecast in April. Slower overall growth would likely dampen the expansion of crude oil demand.