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Oil Prices Jump After Inventory Drop

Oil prices rallied on Wednesday after industry data showed U.S. crude and gasoline stocks fell more than expected last week.

Benchmark Brent crude jumped nearly 3 percent to $42.50 a barrel on Wednesday, after falling over 1 percent in the previous session.

U.S. crude futures were also up 3 percent at $40.44 a barrel, after having fallen 1.1 percent on Tuesday.

The American Petroleum Institute (API) estimated on Tuesday a major draw in crude oil inventories of 8.156 million barrels for the week ending June 26, against analysts' forecasts for a draw of 710,000 barrels.

The API also reported a draw of 2.459 million barrels of gasoline for the week, while distillate inventories rose by 2.638-million barrels.

Official inventory data from the U.S. Energy Information Administration is due out later in the session.

Meanwhile, the Organization of the Petroleum Exporting Countries' (OPEC) oil output hit the lowest in two decades in June as Saudi Arabia and other Gulf Arab members made larger cuts, a Reuters' survey found.

It was reported that the 13-member OPEC pumped 22.62 million barrels per day (bpd) on average in June, down 1.92 million bpd from May's revised figure.

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