Crude headed higher in Asia Wednesday after surprise API estimates

U.S. five dollar currency notes bills; taken September 2018.

Crude oil prices are headed higher ahead of Asian trade on Wednesday after the American Petroleum Institute reported a surprise drop in weekly crude inventories.

ICE Brent crude prices were last quoted at US$81.56 a barrel, up 0.97 percent, while NYMEX West Texas Intermediate was up 0.57 percent to US$72.33 a barrel. Brent settled up 0.78 percent to US$81.41 a barrel, while WTI rose 0.20 percent to US$71.92 a barrel.

U.S. crude stocks fell 2.1 million barrels in the week to Oct. 12 to 408.5 million, compared to an expected build of 2.2 million barrels, API said.

Gasoline stocks fell 3.4 million barrels, compared to an expected decline of 1.1 million barrels, API said. Distillates fell by 246,000 barrels, compared with an expected 1.3 million-barrels dip.

The data will be followed Wednesday at 10:30 a.m. U.S. EDT by official figures from the U.S. Energy Information Administration. The two data sets often diverge.

Elsewhere, U.S. Secretary of State Mike Pompeo met with King Salman and the crown prince of Saudi Arabia to discuss the Oct. 2 disappearance of journalist Jamal Khashoggi at a Saudi consulate in Turkey.

The Trump administration doesn’t want the case of the presumed dead journalist to affect arms sales and wider ties with Saudi Arabia. With the U.S. implementing fresh sanctions on Iran next month, it needs Riyadh to help cover the oil shortfall from Iran’s exports.