Crudeoil settled up 0.42% at 5699 rebounded from an 8-month low to end sharply higher surged after a weekly official oil report from the U.S. EIA showed crude oil stockpiles in the U.S. to have dropped much more than expected last week. Yesterday report from the U.S. EIA showed U.S. crude oil inventories to have dropped 4.5mbls in the week ended August 15, while market anticipated a decline of 1.2mbls. The EIA report showed U.S. crude oil inventories at 362.50mbls, end last week. Gasoline stocks increased by 0.6mbls last week. Inventories of distillate, including heating fuel, dropped 0.96mbls. Also a report from the API late Tuesday showed U.S. crude oil stockpiles to have declined by a less than expected 1.4mbls in the week ended August 15. Meanwhile, the minutes of the meeting held July 29-30 showed the FOMC voted 9-1 to maintain its current policy of very gradually withdrawing stimulus from the U.S. economy. Fed forecasts show most officials expect to start raising rates next year, but some members are now making the case for a "relatively prompt" rate hike. The Fed debated when to hike interest rates amid signs the labor market has moved closer to normal, the minutes of the Fed's July policy meeting showed. The situation in Ukraine and the Middle East also continue to be in focus, with reports of some clashes in parts of eastern Ukraine. In Iraq, fighting is on at Mosul Dam, a day after Iraqi and Kurdish forces were reported to have recaptured it from the Islamic militants. Technically market is under fresh buying and getting support at 5666 and below same could see a test of 5633 level, And resistance is now likely to be seen at 5726, a move above could see prices testing 5753.

Trading Ideas:

Crudeoil trading range for the day is 5633-5753.

Crudeoil prices gained after a weekly U.S. supply report revealed that inventories dropped more than expected.

The U.S. EIA said in its weekly report that U.S. crude oil inventories declined by 4.5 million barrels, far surpassing expectations for a decline of 1.2 million barrels.

Growing supplies and falling prices have raised talk of a possible output cut by the OPEC which controls about one-third of daily oil supplies.