Oil prices climb on reports of falling U.S. supplies

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Oil prices climbed Wednesday on indications of falling U.S. crude supplies, with a key industry report due later. August West Texas Intermediate crude

CLQ19, +1.76%

rose $1.27, or 2.2%, to $59.09 a barrel, after falling fractionally on Tuesday. The contract wrapped up trading Monday at $57.90, the highest front-month contract finish since May 29, according to Dow Jones Market Data. Prices rose 8.8% for last week, the biggest weekly percentage climb since the week ended Dec. 2, 2016. International benchmark August Brent crude

BRNQ19, +1.32%

gained 90 cents, or 1.4%, to $66.05 a barrel. Brent rose 0.3% to $65.05 on Tuesday. Last Friday, the contract saw its highest close—at $65.20—since May 30 and gained more than 5% last week. Late Tuesday, the American Petroleum Institute reported a 7.5 million-barrel drop in U.S. crude supplies for the week ended June 21, according to sources. It also reported a stockpile decline of 3.2 million barrels in gasoline, and a 160,000 barrels gain in distillate supplies. The API data come ahead of Energy Information Administration supply data due later on Wednesday. The EIA data are expected to show crude inventories fell by 2.8 million barrels last week, according to a survey of analysts conducted by S&P Global Platts. July gasoline

RBN19, +3.14%

 jumped 3.9% to $1.954 a gallon after that report. July natural gas

NGN19, -0.39%

 fell 0.4% to $2.299 per million British thermal units. July natural gas

NGN19, -0.39%

 fell 0.4% to $2.299 per million British thermal units. Analysts at Citigroup said they “remain bullish oil in the near-term for fundamental and financial reasons, with $78 Brent on the horizon,” in a note to clients on Wednesday. “Inventories look to be falling briskly, OPEC+ is keeping production cuts in place perhaps into 2020, and geopolitical risk is high,” they said. The Organization of the Petroleum Exporting Countries and its allies will hold meetings on July 1-2, moved from an original date of June 25-26. Tuesday’s slight drop for U.S. oil comes after three straight days of gains, which were driven by fears that rising tensions between the U.S. and Iran could lead to a disruption in oil markets. Criticizing fresh Washington sanctions targeting the Islamic Republic’s supreme leader and other top officials, Iran said Tuesday the measures spell the “permanent closure” for diplomacy between the two nations, the Associated Press reported. The Trump administration has turned up the economic pressure on Tehran since Trump pulled the U.S. out of the 2015 nuclear deal in May 2018, hoping to drive Iran to accept a tougher agreement that would end uranium enrichment and curb its regional ambitions. The U.S. is seeking ultimately to drive the Islamic Republic’s oil exports to zero to prompt the nuclear concessions. — Myra P. Saefong contributed to this article

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