Oil prices edged higher on Wednesday as industry data showed a bigger-than-expected drop in inventories.
Brent crude for March delivery rose 0.3 percent to $56.76 a barrel, after having risen 1.7 percent in the previous session. WTI crude futures were up 0.4 percent at $53.43 after gaining almost 2 percent on Tuesday.
The American Petroleum Institute reported late on Tuesday that crude inventories in the U.S. dropped by 5.8 million barrels for the week ending January 8. Analysts had predicted an inventory draw of around 2.3 million barrels for the week.
Hopes of improved demand on the back of the vaccine rollouts across the world and the higher supply cut recently announced by the Saudi Arabia for the next two months also proved supportive for oil prices as Covid-19 cases continue to rise.
Meanwhile, stabilizing U.S. Treasury yields helped the dollar trade back in positive territory today.