Oil Extends Gains After Large Drop In Crude Stocks

Oil prices rose on Wednesday to extend gains from the previous session, as a U.S.-led price cap initiative loomed, and data showed a larger-than-expected drawdown in crude inventories last week.

Benchmark Brent crude futures climbed 0.9 percent to $89.16 a barrel, while WTI crude futures were up 0.8 percent at $81.61.

Both contracts rose over 1 percent on Tuesday after Saudi Arabia said that OPEC+ would stick with output cuts and could likely take steps to balance the market.

OPEC+ next meets to review output on Dec. 4 and it appears that the OPEC+ decision on October 5 to cut production would continue to remain until the end of 2023.

Data from the American Petroleum Institute showed that U.S. crude inventories fell by about 4.8 million barrels for the week ended Nov. 18.

Analysts had expected a smaller 1.1-million-barrel drawdown in crude inventories.

Meanwhile, the Group of Seven nations should soon announce the price cap on Russian oil exports, a senior U.S. Treasury official reportedly said, adding that it will probably be adjusted a few times a year.

The move to cap the price of Russian oil exports will clear the way to enforce the measure before a Dec. 5 deadline.