Crude oil futures settled notably higher on Wednesday after data showed a drop in U.S. crude inventories last week, and Saudi Arabia said it would significantly reduce its production in the next two months.
West Texas Intermediate Crude oil futures for February ended higher by $0.70 or about 1.4% at $50.63 a barrel, the highest settlement in more than 10 months.
Brent crude futures were gaining about $0.40 at $54.01 a barrel.
Data released by Energy Information Administration (EIA) this morning showed crude inventories in the U.S. dropped by 8 million barrels in the week to January 1, nearly 4 times the expected drop.
Gasoline stocks were up 4.5 million barrels last week, while distillate stockpiles were up 6.4 million barrels.
The American Petroleum Institute reported late Tuesday that U.S. crude inventories fell by 1.663 million barrels last week, after a draw of 4.785 million barrels the previous week. However, there were sharp jumps in gasoline and distillates stockpiles.
Saudi Arabia announced on Tuesday that it would cut its crude output by an additional 1 million barrels per day over the next two months.
This move by Saudi Arabia means the OPEC+ will be reducing output by 8.125 million barrels per day and 8.05 million barrels per day in February and March, respectively.