Oil rallies as steep USA gasoline stock draw overshadows crude build

Oil climbs to 5-month high amid OPEC cuts, US sanctions, Libya fighting

Brent and WTI crude oil futures have risen by around 30 percent and 40 percent respectively since the start of the year.

"Of course, Venezuela and Iran continue to be the usual suspects when it comes to near-term oil price projections with US sanctions targeting the oil industry of both countries as a regime-changing tool".

Worldwide benchmark Brent futures were at $70.66 per barrel at 0158 GMT, up 5 cents from their last close.

The West Texas Intermediate for May delivery increased 0.63 USA dollar to settle at 64.61 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery rose 1.21 dollars to close at 71.73 dollars a barrel on the London ICE Futures Exchange.

Both benchmarks hit five-month highs on Tuesday, before easing on global growth worries.

US crude oil stocks rose more than expected last week to the highest in almost 17 months as imports climbed, while gasoline inventories posted their steepest drawdown since September 2017, the Energy Information Administration said on Wednesday.

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Net U.S. crude imports rose last week by 210,000 barrels per day (bpd) while exports alone fell by 374,000 bpd to 2.3 million bpd, the lowest level since late January.

The U.S. sanctions on Iran and Venezuela also caused supply declines in these countries, which are forecast to see their outputs decrease further.

In the United States, crude oil production has risen by more than 2 million bpd since early 2018, to a record 12.2 million bpd, with many analysts expecting output to exceed 13 million bpd soon. "Declines from these two exempt countries account for nearly 47 percent of the reduction seen from OPEC", ING said.

Oil prices rose on Wednesday after USA data showing a hefty drawdown in gasoline stockpiles overshadowed crude inventories rising to their highest levels in more than a year.

US crude exports have also risen, breaking through three million bpd for the first time earlier this year.

But then the USA granted waivers to Iran's biggest oil customers, including China and India, and OPEC and its Russia-led allies forged in December a new production cut deal aimed at reversing the new glut that had started to build in Q4 2018 after OPEC anticipated incorrectly.

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