(Bloomberg) — Oil rose for a second day after an industry report showed a bigger-than-expected drop in American crude inventories, allaying concerns that the market is poised to tip back into oversupply.Futures in New York climbed as much as 1.6% after a 2.4% jump Tuesday. The American Petroleum Institute said stockpiles fell by 11.1 million barrels last week, according to people familiar with the data. That would be the largest decline since June if confirmed by government figures due Wednesday. The API also reported a 2.8 million barrel draw in distillates and gasoline inventories.“Oil markets are broadly balanced at the moment, benefiting from the typical seasonal acceleration in demand,” said Martijn Rats, global oil strategist at Morgan Stanley.Crude is still heading for its second monthly drop this year amid spreading pessimism over international trade and economic growth. However, prices are drawing some support from political tensions in the Middle East, with Iran’s leadership rebuffing suggestions of a meeting with President Donald Trump until the U.S. lifts sanctions on the country.See also: Wary of Trump’s Flip-Flops, China Prepares for Worst on TradeWest Texas Intermediate crude for October delivery rose 82 cents, or 1.5%, to $55.75 a barrel on the New York Mercantile Exchange as of 10:32 a.m. in London. It settled $1.29 higher on Tuesday.Brent for October settlement advanced 69 cents, or 1.2%, to $60.20 a barrel on the ICE Futures Europe Exchange, after rising 1.4% on Tuesday. The global benchmark crude traded at a $4.45 premium to WTI.U.S. crude inventories fell by 2.85 million barrels in the week to Aug. 23, according to a Bloomberg survey of analysts. If the API figures are confirmed by Energy Administration data, it will be the second drop in a row following two weeks of gains that raised oversupply fears.The Organization of Petroleum Exporting Countries and its allies said they expect a “significant” decrease in global crude inventories in the second half of this year after they trimmed output more than planned. The Joint Ministerial Monitoring Committee, composed of key nations from the OPEC+ coalition, said the group’s implementation of cutbacks was 159% in July.\–With assistance from James Thornhill.To contact the reporters on this story: Heesu Lee in Seoul at hlee425@bloomberg.net;Grant Smith in London at gsmith52@bloomberg.netTo contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Rakteem Katakey, Alaric NightingaleFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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