Oil futures rose on Wednesday after U.S. industry data suggested a larger-than-expected drawdown in crude inventories last week, although a stronger U.S. dollar curbed gains.
Oil prices were also supported by an overnight surge in U.S. equities and strong U.S. home sales that could point to the U.S. Federal Reserve raising interest rates as early as June.
U.S. crude futures had climbed 56 cents to $49.18 a barrel as of 0042 GMT after ending the previous session up 54 cents.
Brent futures rose 50 cents to $49.11 a barrel, having closed 26 cents up previously to snap a four-day slide.
U.S. crude stocks dropped by 5.1 million barrels to 536.8 million last week, data from industry group the American Petroleum Institute showed on Tuesday. That was double expectations of analysts polled by Reuters.
Gasoline stocks climbed by 3.6 million barrels, while inventories of distillate fuels, including diesel and heating oil, fell by 2.9 million barrels, the API data showed.
Investors are awaiting confirmation of the big draw when the U.S. Energy Information Administration (EIA) issues official inventory figures on Wednesday.
“U.S. government data are expected to show that oil inventories have retreated from an eight-decade high, putting further upward pressure on prices,” ANZ said in a note.
That came as some crude producers restarted operations on Tuesday in Canada’s energy heartland, where wildfires have knocked out up to around 1.5 million barrels per day (bpd) of shale production.
Almost all of the oil from the tar sands production is shipped to the United States, said New York-based energy consultant Poten.
Oil prices were buoyed by a rise in U.S. stocks, with the Dow Jones industrial average, the S&P 500 and the Nasdaq composite all closing up.
Oil prices shrugged off the impact from a strong U.S. dollar which hovered close to a 10-week high against the euro in Asian trade on Wednesday, while the dollar index was also up against a basket of major currencies.
A strong dollar typically makes greenback-denominated oil more expensive for holders of other currencies.
Iraq is pumping about 4.5 million bpd now and is aiming to boost that to 5.5 million to 6 million bpd by 2020, Falah Alamri, head of Iraq’s State Oil Marketing Organisation (SOMO) said at an Iraq oil conference on Tuesday. (Reporting by Keith Wallis; Editing by Joseph Radford)