Oil hits 2-month peak ahead of EIA weekly report

Oil prices continued to rise as the US market opened on Wednesday, extending gains for the third straight day, and hit a 2-month peak after preliminary data showed a drop in the US crude inventories, ahead of the release of the EIA weekly report.

US crude rose 0.5% to the highest since March 8 at $66.63 a barrel, after opening at $66.28, and hit a low at $66.05, and Brent crude rose 0.7% to the highest since March 15 at $69.86 a barrel, after opening at $69.36, and hit a low of $69.27.

US crude gained 2.8% yesterday, and Brent crude futures rose 2.7%, thanks to hopes of improving demand in the US and Europe after easing lockdown restrictions.

The American Petroleum Institute (API) revealed yesterday in preliminary data that the US crude inventories fell 7.7 million barrels during the week ending April 30, beating forecasts of a drop by 2.5 million barrels.

The total US commercial inventories fell to 491.2 million barrels, the lowest level since the week ending February 26, a positive sign on the US domestic demand.

While the US Energy Information Administration's official data will be released later today, amid forecasts for inventories to drop by 1.9 million barrels.

The US production fell 100K barrels last week, with a total at 10.9 million barrels per day.