Oil zooms higher, pulls off multi-month lows after US inventories

Manual shutdown equipment at an Anadarko Petroleum oil rig in Fort Lupton, Colorado, Aug. 12, 2014.
Jamie Schwaberow | Bloomberg | Getty Images

U.S. crude oil rose in choppy trading on Wednesday ahead of the September contract's expiration and after government data showed crude stocks in the United States fell sharply last week.

U.S. crude stocks slid by 4.5 million barrels last week, the U.S. Energy Information Administration (EIA) said, more than analysts had expected. Stocks in Cushing, Oklahoma—the delivery point for the U.S. crude contract—rose by 1.76 million barrels. Gasoline stocks rose 585,000 barrels against expectations for a drop while distillate stocks fell 960,000 barrels, slightly more than forecast.

Brent crude for October delivery was up 50 cents near $102 a barrel. The contract touched $101.07 on Tuesday, its lowest since June 26, 2013.

U.S. crude futures, also known by their West Texas Intermediate benchmark or WTI, have been pressured by growing supplies of light-sweet oil from booming North American output, hitting a seven-month low of $94.26 on Tuesday.

The contract rose by $1.59 a barrel to settle at $96.07, as traders bought back short positions ahead of the contract's expiration.

Brent firmed as traders said a 12 percent slide since June might be overdone. Brent has fallen by more than $13 a barrel in two months as increased output of light sweet crude created a glut in the Atlantic Basin.

--By Reuters