NEW YORK: Oil prices rose over 1% on Wednesday, after a large unexpected drawdown in US crude inventories and a warning from the Saudi energy minister that raised the prospect of further OPEC+ production cuts.

Brent crude futures rose 90 cents, or 1.2%, to $77.74 a barrel by 12:29 p.m. EDT (1629 GMT). US West Texas Intermediate crude (WTI) gained 97 cents, or 1.3%, to $73.88.

US crude inventories posted a massive surprise weekly drawdown of 12.5 million barrels to 455.2 million barrels, the Energy Information Administration said. Analysts had expected an 800,000-barrel rise.

US gasoline stocks dropped by 2.1 million barrels in the week to 216.3 million barrels, the EIA said, while distillate stockpiles fell by 600,000 barrels to 105.7 million barrels.

The US Memorial Day holiday on May 29 marks the beginning of the peak summer travel season and higher fuel demand.

“Refiners are absolutely going max out with refinery runs right now, trying to keep up with demand,” said Phil Flynn, an analyst at Price Futures Group.

“Oil prices have been so focused on the debt ceiling and interest rates, but really they haven’t focused on the supply and demand side which has tightened in the last couple of weeks.” Saudi Arabia’s energy minister said short-sellers betting oil prices will fall should “watch out” for pain, comments some investors took as a signal that OPEC+, the Organization of Petroleum Exporting Countries and allies including Russia, could consider further output cuts at a meeting on June 4.

“Oil prices are trading higher ... buoyed by the latest short-seller warning from Saudi Arabia,” said OANDA senior market analyst Craig Erlam.

Negotiators for Democratic President Joe Biden and Republican Speaker Kevin McCarthy were expected to reconvene on Wednesday morning, a source familiar with the matter said.

Oil price gains were limited by news that Britain’s stubbornly high inflation rate fell by less than expected last month, according to official data that raised the chances of more interest rate hikes.