NEW YORK - Oil prices rose about 1 percent on Wednesday after U.S. government data showed domestic crude inventories fell to their lowest since February 2015, easing worries about oversupply that have weighed on markets in recent weeks.
Brent crude futures rose 70 cents, or 1 percent, to $74.14 a barrel by 12:41 p.m. EDT (1641 GMT).
U.S. West Texas Intermediate (WTI) crude rose $1.06 to $69.58 a barrel, a 1.6 percent gain.
U.S. crude inventories fell 6.1 million barrels in the week to July 20, data from the U.S. Energy Information Administration showed, to 404.9 million barrels, their lowest since February 2015. Analysts had expected a decrease of 2.3 million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 1.1 million barrels, EIA said, their lowest since November 2014.
"The decrease puts the focus once again on tightening supplies here in the U.S. and it also puts the focus on the fact that U.S. gasoline demand is going through the roof," said Phil Flynn, analyst at Price Futures Group in Chicago.
Gasoline stocks fell 2.3 million barrels, EIA data showed, compared with analysts' expectations in a Reuters poll for a 713,000-barrel drop. Meanwhile, U.S. Midwest gasoline stockpiles fell to their lowest seasonally since 2015.
However, price gains were limited after the release of the data because a majority of the crude stock draw was in the West Coast region, also known as PADD 5. Stocks in the area fell their most since December 2011.
The market usually discounts large inventory drawdowns when they are concentrated in the West Coast, said John Kilduff, a partner at Again Capital Management in New York.
Limited connectivity from the West Coast to the rest of the country means the region is often perceived by the market as being largely isolated from overall U.S. supply-demand fundamentals.
"PADD 5 is just not as critical to the overall inventory situation," Kilduff said.
Sentiment was also supported by an International Monetary Fund report about skyrocketing inflation in Venezuela, limiting its ability to boost oil output, said Stephen Innes, a trader at brokerage OANDA.
"Venezuelan oil production has already plummeted to a new 30-year low of 1.5 million barrels a day in June," he said.
Oil prices have come under pressure this month as a trade dispute between the United States and China, as well as other major economic blocs, has raised the possibility of slower economic growth and weaker global energy demand.
But the global economy is still growing and it is not clear how the trade dispute may impact business.
Reports that China will increase infrastructure spending have also helped reduce concerns that U.S.-China trade tensions will dent Chinese demand for oil.