Oil prices jumped about 3% today after the US government reported crude inventories fell unexpectedly for the first time since March, adding to concerns over supply disruptions in Canada and Nigeria.
The US Energy Information Administration (EIA) said crude inventories fell 3.4 million barrels last week, compared with analysts' expectations for an increase of 714,000 barrels and the American Petroleum Institute's (API) build of 3.5 million barrels in preliminary data issued yesterday.
The EIA report "has been quickly viewed as bullish, with the crude draw just about exactly opposite to what API had," said Dominick Chirichella, senior partner at the Energy Management Institute in New York.
Oil markets extended their gains after the data. Brent crude futures were up $1.45, or 3.2%, to $46.97 per barrel by 4.50pm Irish time.
US crude's West Texas Intermediate futures gained $1.25, or 2.8%, to $45.91.
Prices rose earlier as Shell announced a Nigerian pipeline closure while Canadian energy firms tried to restart closed facilities that had halted more than one million barrels per day (bpd) in supply after a huge wildfire in Alberta's oil sands region.
"We were not totally surprised with the draw after the shut-in in Canadian production," Tariq Zahir, trader and managing partner at Tyche Capital Advisors, New York, said, referring to the EIA report.
"But while the fires have taken tar sands production offline, we believe this will not be a prolonged event."
The EIA, in a separate report today, said it expected Brent to rebound in the next year to about $76 a barrel on continued increase in demand.
