[Editor's note: This story was updated at 10:35 a.m. CST July 19.]
Oil prices jumped almost 1.5% on July 19, extending gains after a U.S. government report showed a bigger weekly draw than forecast in crude and gasoline stocks along with a surprise drop in distillate inventories.
The Energy Information Administration (EIA) said U.S. crude stocks fell 4.7 million barrels (bbl) during the week ended July 14., exceeding estimates for a 3.2 million draw in crude stocks in a Reuters poll. A day earlier, preliminary data from the American Petroleum Institute showed a 1.6 million bbl increase.
Brent futures for September delivery were up 69 cents, or 1.4%, at $49.53/bbl by 10:09 a.m. CST (15:09 GMT). U.S. West Texas Intermediate (WTI) crude for August rose 64 cents, or 1.4%, to $47.04 on its second to last day as the U.S. front month.
Before the EIA report, WTI and Brent futures were up about 0.6%, supported by strong demand for gasoline.
"The report was more good news for the oil industry as inventories declined across the board for crude and products by over 10 million barrels," Andrew Lipow, president of Lipow Oil Associates in Houston said.
"Gasoline inventories are now nearly 5% lower than this time last year. That is a reflection of good consumer demand," Lipow said.
EIA said distillate stocks decreased 2.1 million bbl and gasoline stocks declined 4.4 million bbl. Analysts polled by Reuters had forecast a 1.2 million bbl build in distillates and a 700,000 bbl draw in gasoline.
U.S. gasoline and distillates futures were both up almost 2% after the data, boosting the products crack spread, a measure of refinery margins, to its highest since November 2016.
The U.S. has become the world's largest oil producer, boosted by output from shale formations, with production of nearly 11 million barrels in 2018, which broke the country's annual record set in 1970.
Refiners have scooped up the Heavy Louisiana Sweet (HLS) at higher prices than Light Louisiana Sweet (LLS), the U.S. coastal benchmark that last traded $7.15 over WTI, traders said.
Demand for energy storage has soared as the COVID-19 pandemic crushed fuel demand, spurring oil producers and traders to fill storage facilities across the U.S.