Oil Extends Gains On Inventory Draw

Oil prices traded higher on Wednesday, extending gains from the previous session on signs of weakening production in the U.S. and higher demand in Europe and China.

Benchmark Brent crude futures rose 0.7 percent to $62.60 a barrel in early European trading, while WTI crude futures were up 0.9 percent at $59.60.

U.S. crude oil stocks fell by 4.49 million barrels in the week ended May 2, according to the American Petroleum Institute (API).

Gasoline inventories showed a draw of 1.97M barrels for the week and stockpiles at the Cushing storage hub showed a draw of 854K barrels, while distillate inventories signaled a build of 2.24M barrels.

The Energy Information Administration will release its weekly U.S. petroleum supply report later in the day.

Prices also drew support from signs of demand improving in Europe and China as well as upcoming U.S.-China trade talks.

Diamondback Energy Inc., the largest independent oil producer in the Permian Basin, said that production has likely peaked in America's prolific shale fields and will decline in the coming months.

Earlier today, the People's Bank of China cut the seven-day reverse repurchase rate to 1.4 percent from 1.5 percent and also trimmed the reserve requirement ratio by half a percentage point, hours after it emerged that senior U.S. and Chinese officials will hold their first trade talks in Switzerland this weekend to ease tensions.