Oil up 1 percent on big U.S. crude draw; output growth seen slowing

Oil prices rose more than 1 percent on Wednesday, supported by an unexpected drop in U.S. crude inventory and a forecast of slower-than-expected supply from the world`s top crude producer.

A record power outage in Venezuela has stalled crude exports from the OPEC-member nation, which is already dealing with reduced shipments as a result of U.S. sanctions.

Brent rose 65 cents, or 1 percent, to $67.32 a barrel, at 10:59 a.m. EST (1459 GMT). U.S. West Texas Intermediate was up $1.12 to $57.99 a barrel, or 2 percent.

Both benchmarks have climbed for three straight days. WTI hit a four-month high, while Brent held near its highest in four months.

U.S. crude stocks fell last week as refineries hiked output, the Energy Information Administration (EIA) said.

Crude inventories fell by 3.9 million barrels in the last week, compared with analysts` expectations for an increase of 2.7 million barrels.

"It`s a big crude oil draw for this time of year," said Bob Yawger," director of energy futures at Mizuho. "Usually you see builds as a function of the refinery utilization rate."

Other EIA data showed U.S. crude output edged down from a record high, dropping 100,000 barrels per day (bpd) to 12 million bpd last week.

On Tuesday, the EIA revised down its estimate for domestic crude production growth in 2019. The EIA also revised down its projected 2020 production figure.

"While the revision is small, the comforting part for bulls was that the direction of the revision was down rather than up," Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.

Oil prices have been boosted by supply cuts led by the Organization of the Petroleum Exporting Countries and allies including Russia.

On Sunday, Saudi Arabia`s Energy Minister Khalid al-Falih said the production-curbing agreement would likely last until at least June. On Monday, the world`s top oil exporter indicated it would cut April exports.

U.S. sanctions against oil exports from OPEC members Iran and Venezuela also supported oil prices.

Exports from Venezuela`s main oil terminal have been stranded as its worst blackout on record has left most of the country without power for six days.

"Expectations are now rife that these blackouts are likely to sow the seeds for steeper production declines and even the potential for acute outages," said Stephen Brennock of oil broker PVM.

"All the while, the pressure to find alternative buyers for its crude will ramp up as a March 29 deadline approaches for US refiners to halt their imports," he said.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)