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 The American Petroleum Institute (API) said U.S. crude stockpiles
fell 3.7 million barrels last week, with stocks at the Cushing,
Oklahoma, delivery point for U.S. crude futures down almost 500,000
barrels.
Although total U.S. oil inventories are at record highs, the draw
suggests a rebalancing of the biggest domestic oil market is under
way as oil production slows in the face of low prices.
Benchmark Brent was up 30 cents a barrel at $49.38 by 1145 GMT. U.S.
light crude was up 40 cents at $46.76.
The U.S. industry data helped oil resist the negative impact of a
sharp contraction in Chinese manufacturing, which darkened the
outlook for the world economy.
Flagging demand is dragging China's factory sector into its sharpest
contraction in 6-1/2 years, a private survey showed on Wednesday,
triggering a flight to safety in Asian markets that analysts say
could extend across the globe.
The preliminary Caixin/Markit China Manufacturing Purchasing
Managers' Index fell to 47.0 in September, its lowest since March
2009. Levels below 50 show a contraction.
Oil prices have been weak for over a year and are now less than half
their peak levels in 2014 thanks to massive oversupply by oil
producers in the Middle East and North America.
Some analysts say oil prices could be about to recover, particularly
if official U.S. government figures confirm that the oil market
there is starting to tighten.
The U.S. Energy Information Administration will publish its figures
at 10:30 a.m. EDT (1430 GMT) on Wednesday.
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"If the EIA confirms the crude draw this afternoon, the market could
go even higher," said Tamas Varga, analyst at London brokerage PVM
Oil Associates. "It is now not unreasonable to expect higher
prices."
Investors remain worried about China.
"China's economic slowdown continues, with factory output and
investment growth both failing to hit targets," oil consultancy
Energy Aspects said.
"With the economy showing little sign of recovery, the 7 percent GDP
growth target set by the government may prove difficult to achieve,"
it added.
Energy Aspects said it expected global crude demand for the second
half of the year to grow at only 1 million barrels per day (bpd),
down from almost 2 million bpd in the first half.
(Additional reporting by Henning Gloystein in Singapore; Editing by
William Hardy and Louise Heavens)
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