Oil rallied for a second straight day on Wednesday as U.S. government data confirmed a big weekly drawdown in domestic crude stockpiles, although profit-taking by players who had bet on the draw pulled the market back from its highs.
The U.S. Energy Information Administration said crude oil inventories fell by 6.8 million barrels last week, four times more than the 1.7 million barrels forecast by analysts in a Reuters poll. Industry group American Petroleum Institute had raised market expectations late on Tuesday when it estimated a draw of 6.7 million barrels.
Oil futures rose 3 percent on Tuesday in anticipation of the draws.
"Obviously, a 6.8 million draw should get the market's reaction," said Jim Williams, energy economist at WTRG Economics in London, Arkansas.
"But with yesterday's move, I'm not sure how much more of an upside we have today," he said, adding the market could slip into the negative as more players who went long before the EIA data take profits.