WASHINGTON (dpa-AFX) - Oil prices rallied on Wednesday after settling at a seven-month low on Tuesday amid China demand concerns.
Prices were buoyed as data showed a fifth straight week of sizable drawdowns in U.S. crude inventories and Israel said it has killed a top Hezbollah commander after carrying out a strike on a southern suburb of the Lebanese capital Beirut.
Also, weak manufacturing data from China added to bets that Beijing will deploy more stimulus measures in the world's second largest economy.
Benchmark Brent crude futures jumped 2.5 percent to $80 a barrel while WTI crude futures were up 2.7 percent at $76.73.
The American Petroleum Institute (API) reported on Tuesday that U.S. crude inventories fell by 4.495 million barrels in the week to July 26, marking the fifth consecutive week of inventory declines as a result of robust summer travel demand.
Analysts had predicted a smaller 2.333-million-barrel draw following a 3.9-million-barrel draw in crude inventories in the previous week.
Meanwhile, Israel has killed a high-ranking Hamas leader in Iran, raising fears that the move could escalate the conflict in the region.
Palestinian militant group Hamas said its leader Ismail Haniyeh was killed in Iran's capital of Tehran.
Elsewhere in China, data showed the country's manufacturing activity shrank for the third consecutive month in July, fueling bets on more stimulus measures.
At a meeting of Politburo on Tuesday, China's leaders have pledged to prioritize boosting consumer spending and mentioned 'counter-cyclical adjustments.'
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