Oil jumped to an intraday high after government data showed U.S. stockpiles fell by more than 12 million barrels, the biggest draw since November. 

The Energy Information Administration showed strong draws in both crude and refined production stockpiles. The bullish data pushed West Texas Intermediate to the highest since early May. Prices were already rallying, backed by Saudi Arabia’s warning to short-sellers on Tuesday to “watch out.” 

Capping crude’s rise is the ongoing impasse in negotiations over the U.S. debt ceiling, which has weighed heavily on broader financial markets. House Speaker Kevin McCarthy said late Tuesday the two parties had yet to reach a deal to avert a first-ever default.

Despite the recent rally, oil is still down around 6 per cent for the year as traders grapple with China’s lackluster post-COVID economic recovery, interest-rate hikes from the Federal Reserve and the U.S. debt conundrum. Russian exports have also remained robust, despite pledges to cut production in retaliation for Western sanctions.


WTI for July delivery rose US$1.71 to $74.62 a barrel at 10:39 a.m. in New York.
Brent for the same month gained $1.72 to $78.56 a barrel.