Crude oil is spiking after the biggest inventory drop in decades

Crude oil prices spiked after government data showed an outsized drop in inventories last week.

The Energy Information Administration said on Thursday that commercial crude oil inventories fell by 14.5 million barrels. According to Investing.com, analysts had expected a build in inventories by 0.225 million barrels. The drop is the largest dating back to at least 1984, according to the website’s data.

Following the data release, West Texas Intermediate crude oil futures in New York jumped by more than 3% to as high as $47.16 per barrel.

As Barclays commodities analysts recently noted, the EIA has acknowledged that the weekly inventories data may overstate consumption.

Oil prices have recently fluctuated on reports of a production agreement among members of the oil cartel OPEC when they meet later in September.

Here’s a chart showing the jump in oil futures:

NOW WATCH: KRUGMAN: There is an argument for doubling the Fed’s inflation target

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.