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Oil Prices Gain after Steep Drop in U.S. Crude Inventories

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Oil prices rose for a third day on Wednesday after industry data indicated U.S. crude inventories fell much more than expected last week, reinforcing bullish views on fuel demand in the world39;s largest economy.

U.S. West Texas Intermediate WTI crude futures rose 43 cents, or 0.7, to 66.12 a barrel at 0704 GMT. Prices climbed as to high as 66.58, the most since March 8.

Brent crude futures were up 49 cents, or 0.7, at 69.37 a barrel after touching a more than sevenweek high of 69.78 earlier in the session.

Both benchmark contracts rose nearly 2 on Tuesday.

The American Petroleum Institute API industry group reported crude stockpiles fell by 7.7 million barrels in the week ended April 30, according to two market sources. That was more than triple the drawdown expected by analysts polled by Reuters. Gasoline stockpiles fell by 5.3 million barrels.

Crude oil prices appear to be supported by a large draw in crude and gasoline inventories, according to API figures, said Margaret Yang, a strategist at Singaporebased DailyFX.

The energy demand outlook is brightened by eased lockdown measures in parts of the U.S. and UK, which helped to offset concerns over lower demand from India and Japan. The upcoming summer driving season may further boost fuel demand and support oil prices.

Traders are awaiting data from the U.S. Energy Information Administration due at 1030 a.m. EDT 1430 GMT on Wednesday to see if official data shows such a large drawdown.

If confirmed by the…

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