Oil climbed more than 1% on Wednesday, paring some of the previous day’s losses, as a drop in U.S. crude inventories and concern about Hurricane Francine disrupting U.S. output counteredconcerns about weak global demand.

U.S. crude stocks fell by 2.793 million barrels, gasoline declined by 513,000 barrels and distillates inventories rose by 191,000 barrels, according to market sources citing the latest week’s American Petroleum Institute figures on Tuesday.

Brent crude futures LCOc1 were up $1.10, or 1.6%, to $70.29 a barrel at 0807 GMT, while U.S. crude futures CLc1 gained $1.11, or 1.7%, to $66.86.

“The API provided some comfort as it showed a sizable decline in crude oil stocks, a forecast-beating draw in gasoline and a tiny build in distillate inventories,” said Tamas Varga of oil broker PVM.

Both oil benchmarks tankedon Tuesday, with Brent falling below $70 toits lowest since December 2021 and U.S. crude droppingto its lowest sinceMay 2023, after OPEC revised down its 2024 oil demand growth forecastfor a second time.

Concern about Hurricane Francine disrupting output in the United States, the world’s biggest producer,also lent support, other analysts said.

“The market rebounded autonomously as Tuesday’s drop was substantial,” said Yuki Takashima, economist at Nomura Securities, adding supply disruption fears from Francine also lent support.

About 24% of crude production and 26% of natural gas output in the U.S. Gulf of Mexico were offline due to the storm, the U.S. Bureau of Safety and Environmental Enforcement (BSEE) said on Tuesday.

Following Tuesday’s report from the API, an industry group, official inventory figures from the U.S. government are due out at 1430 GMT.

Eleven analysts polled by Reuters estimated on average that crude inventories rose by about 1 million barrels and gasoline stocks fell by 0.1 million barrels.
Source: Reuters (Additional reporting by Yuka Obayashi; editing by Jason Neely)