Oil gains on economic recovery hopes


    TOKYO- Crude oil futures extended gains on Wednesday after a bigger-than-expected draw in US crude stockpiles and as solid US and Chinese factory activity fuelled optimism of a recovery from the pandemic, boosting investor risk appetite.

    Brent crude futures rose 37 cents to $45.95 a barrel, extending gains into a third day.

    US West Texas Intermediate futures rose 34 cents to $43.10, following the previous day’s gain by 15 cents.

    US crude inventories fell by 6.4 million barrels in the week to Aug. 28 to about 501.2 million barrels, the American Petroleum Institute (API) said, against analysts’ expectations for a draw of 1.9 million barrels.

    Gasoline stocks also fell by 5.8 million barrels, more than analysts’ estimates of a draw of 3.0 million barrels.

    Analysts had forecast a sixth weekly drawdown in US crude inventories in a Reuters poll.

    “A bigger-than-expected draw in the US stockpiles and growing hope for an economic recovery in the United States and China after healthy factory data prompted buys in oil futures,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

    US manufacturing activity accelerated to a more than 1-1/2-year high in August amid a surge in new orders, lending support to Wall Street and oil markets.

    China’s factory activity also expanded at the fastest clip in nearly a decade in August, bolstered by the first increase in new export orders this year as manufacturers ramped up production to meet rebounding demand, a private survey showed on Tuesday.

    “Also, slower-than-expected resumption of oil output in the United States after Hurricane Laura raised concerns over tighter supply,” Kazuhiko Saito, chief analyst at Fujitomi Co, said.