NEW YORK (DTN) -- New York Mercantile Exchange oil futures settled higher this afternoon for the second straight day on the back of a weakening dollar and data from the Energy Information Administration showing a bigger-than-expected draw for U.S. crude stockpiles and a drop in domestic crude production during the week-ended June 24.
The EIA's report, which also showed a draw for distillates and a surprise rise in gasoline stockpiles, added to Tuesday's data from the American Petroleum Institute that showed stock draws across the board for the week profiled.
The futures gains were also part of a relief rally for the broader market that reflects easing fears about Britain's decision last week to leave the European Union. Investors are growing cautiously optimistic about the U.S. economy.
NYMEX August West Texas Intermediate crude oil futures settled $2.03 higher at $49.88 per barrel (bbl), off a three-day high of $50.00 posted during market-at-close trade. August Brent on the IntercontinentalExchange also climbed $2.03 to $50.61 bbl, off a four-day high of $50.74.
NYMEX July ULSD futures spiked 6.24 cents to $1.5335 gallon, off a 2-1/2 week high of $1.5354. July RBOB futures rose 1.48 cents to $1.5248 gallon, off a two-day high of $1.5330.
EIA said commercial crude stockpiles dropped 4.1 million bbl last week, more than the API's report that showed a 3.86 million bbl draw, while the market expected a 2.7 million bbl draw.
At the Cushing, Oklahoma, delivery location for NYMEX WTI crude, supply fell 1.0 million bbl, which was in line with API's 1.21 million bbl draw but more than expectation for a draw of 700,000 bbl.
Domestic crude oil production also fell 55,000 bpd to 8.622 million bpd, the lowest U.S. output rate since September 2014.
On products, EIA reported a 1.4 million bbl gasoline stock build versus API data showing a 415,000 bbl draw while a survey called for a 300,000 bbl decline. EIA also reported a 1.8 million bbl distillates stock draw compared with API's reported 832,000 bbl stock decline. Those surveyed projected stocks would hold steady.
Implied demand edged up for distillates while easing for gasoline and refinery crude input rose.
Overseas, a potential oil workers' strike in Norway and crude supply disruptions in Venezuela and Nigeria added support to the futures complex.
Norwegian workers union gave a strike notice effective for Saturday, June 2, if a deal on wages is not reached by midnight Friday.
The oil complex also was boosted by on risk-on trade that lifted global equities as fears ease over Brexit, with analysts minimizing the impact of that decision.
On Wall Street, the Dow Jones Industrial Average rallied more than 280 points this afternoon as the U.S. dollar weakened and the Commerce Department reported higher U.S. consumer spending and personal income for May.
George Orwel can be reached firstname.lastname@example.org
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