Oil prices increased on Thursday over a more-than-expected drop in US crude oil inventories, as supply disruptions continue in the US Gulf of Mexico following two hurricanes that hit the region.
International benchmark Brent crude was trading at $76.38 per barrel at 0535 GMT for a 0.25% rise after closing Wednesday at $76.19 a barrel.
American benchmark West Texas Intermediate (WTI) was at $72.44 per barrel at the same time for a 0.29% increase after it ended the previous session at $72.23 a barrel.
The more-than-expected drop in US stockpiles pushed prices higher.
According to the latest data released by the Energy Information Administration (EIA) late Wednesday, US commercial crude oil inventories dropped by 3.5 million barrels, or 0.8%, to 414 million barrels during the week ending Sept. 17, compared to the market expectation of a 2.4 million-barrel draw.
Strategic petroleum reserves, which are not included in commercial crude stocks, also decreased to 619.6 million barrels last week, while gasoline inventories rose by 3.5 million barrels to 221.6 million barrels over that period.
A significant drop in inventories indicates an increase in crude demand in the US, the world’s largest oil consumer, assuaging market concerns over dwindling demand.
Soaring natural gas prices also support the upward price trend with investors encouraged to shift from gas to oil ahead of the winter season.
However, the stronger dollar, which hit a one-month high after the US Federal Reserve's policy announcement late Wednesday, was not enough to sustain a bearish market sentiment.
Fed Chair Jerome Powell told a media conference that the bank may conclude tapering -- the process of scaling back its $120 billion worth of monthly bond purchases -- by the middle of 2022.
