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U.S. Crude Oil Inventories Fell by 8.50M Barrels Last Week: EIA

U.S. crude oil inventories fell more than expected last week, logging their seventh-consecutive weekly draw, according to official data released Wednesday. The Energy Information Administration said in its regular weekly report that crude oil inventories decreased by about 8.5 million barrels in the week to July 26. That was compared to forecasts for a stockpile draw of 2.59 million barrels, after a decline of 10.84 million barrels in the previous week. The EIA report also showed that gasoline inventories fell by 1.79 million barrels, compared to expectations for a draw of 1.45 million barrels, while distillate stockpiles unexpectedly decreased by 0.89 million barrels, compared to forecasts for a gain of 1.05 million. U.S. crude prices rose 1.2% to $58.76 a barrel by 10:34 AM ET (14:34 GMT), compared to $58.44 prior to the publication. London-traded Brent crude futures traded up 1.2% to $65.39 a barrel, compared to $65.09 ahead of the release. Oil had been on the rise before the publication after the American Petroleum Institute reported that U.S. stockpiles had dropped by 6.02 million barrels. Oil has traded higher in the last five sessions in the run-up to the Federal Reserve’s rate decision. The U.S. central bank is expected to cut interest rates by a quarter-point, in what could provide incentive for diverting capital into inflationary assets such as oil. But despite that run, crude has been under pressure in July as a slowing global economy has increased concerns over the outlook for oil demand. WTI is little changed on the month, but Brent has fallen around 2% since the end of June. Washington and Beijing ended two days of renewed trade talks on Wednesday that showed little progress in alleviating the dispute, which runs the risk of further dampening the global economy. High-level officials are not expected to renew negotiations until September.