Oil jumps to 1-week high after US inventories drop

Oil prices jumped on Wednesday, to extend gains for the third straight day, and hit a 1-week high after a larger-than-expected drop in the US crude inventories according to preliminary data and ahead of the EIA weekly report.

US crude rose 1.4% to the highest level since April 5 at $61.28 a barrel, after opening at $60.44, and hit a low at $60.40, and Brent crude rose 1.3% to its 1-week high of $64.84 a barrel, after opening at $64.04, and hit a low of $63.90.

US crude gained 1.4% yesterday, and Brent crude futures rose 1.2%, in the second straight daily gain, as most dollar-denominated commodities and metals.

The American Petroleum Institute (API) revealed yesterday in preliminary data that the US crude inventories fell by about 3.6 million barrels during the week ending April 9, beating forecasts of a drop by 2.9 million barrels.

The total commercial inventories fell to 494.2 million barrels, the lowest level since the week ending March 12, which is considered a positive sign of the US domestic demand.

While the US Energy Information Administration's official data will be released later today, amid forecasts for inventories to fall by 2.4 million barrels.