Oil rallies after EIA reports drop in US stockpiles

Oil prices turned higher and spiked to fresh highs near $46.00 a barrel, after the US Energy Information Administration (EIA) reported crude oil inventories unexpectedly dropped last week.

According to the EIA, US crude oil inventories fell by -3.41 million barrels in the week ended May 6, against expectations of a 0.714 million barrels build, while output fell 0.261% to 8.802 million.

West Texas Intermediate crude futures rallied on the news, reaching a peak of $45.73 a barrel and it was last at $45.60/bbl on the New York Mercantile Exchange, up 2.1% on the day.

On Tuesday, the American Petroleum Institute had reported a 3.45 million-barrel increase.