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Oil Prices Rise Over 1% After Large Inventory Draw

Oil prices rose sharply on Wednesday after the release of bullish U.S. inventory data and amid optimism that OPEC and other producing countries may agree to extend output cuts to support prices.

Benchmark Brent crude jumped 1.2 percent to $63.12 a barrel, while West Texas Intermediate futures were up 1.3 percent at $58.12 a barrel.

The American Petroleum Institute (API) has estimated a large crude oil inventory draw of 7.2 million barrels for the week ending September 5, more than twice the amount that analysts had forecast.

Official inventory data will be released by the U.S. Energy Information Administration (EIA) later in the day.

As OPEC and its allies prepare to meet later this week, Iraqi Oil Minister Thamer Ghadhban told CNBC the country will reduce oil production to comply with OPEC demands.

Signs of an easing in trade tensions between the United States and China also buoyed sentiment.

Ahead of talks scheduled for next month, China announced that it would exempt 16 American-made products from tariffs as a sign of goodwill.

The list included varieties of animal feed such as alfalfa and fish meal, cancer drugs gefitinib and capecitabine, base oil for lubricants and lubricating grease, and some farm chemicals.

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