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July 26, 2017 8:45 AM, EDT

Oil Climbs From Seven-Week High on Signs US Stockpiles Plunged

Oil Rig Robert Seale/Bloomberg News

Oil extended gains from the highest close in seven weeks as industry data showed U.S. crude stockpiles plunged, easing a glut.

Futures climbed as much as 1.5% in New York after rising 4.6% in the previous two sessions. Inventories tumbled by 10.2 million barrels last week, the American Petroleum Institute was said to report. If that decline is replicated in government data July 26, it would be the biggest since September. The United Arab Emirates reiterated its commitment to OPEC production cuts and said it would deepen its own curbs.

Oil has traded below $50 a barrel since May amid concern that rising global output will offset reduced flows from members of the Organization of Petroleum Exporting Countries and its allies including Russia. While U.S. crude stockpiles continue to decline during a period of strong seasonal demand, they remain about 100 million barrels above the five-year average.

The figure from the API “points to the largest draws in crude inventories year-to-date,” said Jan Edelmann, an analyst at HSH Nordbank AG in Hamburg. “If this number is confirmed by the official Energy Department report, this would help oil to maintain the current price level or to appreciate even further.”

West Texas Intermediate for September delivery rose as much as 70 cents to $48.59 a barrel on the New York Mercantile Exchange, and was at $48.36 as of 8:48 a.m. local time. Total volume traded was about 7% above the 100-day average. Prices gained $1.55 to $47.89 on July 25, the highest close since June 6.

Brent for September settlement climbed as much as 62 cents, or 1.2%, to $50.82 a barrel on the London-based ICE Futures Europe exchange, after adding 3.3% on July 25. The global benchmark traded at a premium of $2.21 to WTI.

U.S. gasoline stockpiles increased by 1.9 million barrels last week, the API said July 25, according to people familiar with the data. Analysts polled by Bloomberg News gauged the decline in crude inventories at 3 million barrels, according to the median estimate.

With assistance by Ben Sharples