Oil prices rose early on Wednesday, for the first time in five sessions, as a report showed a larger than expected drop in U.S. inventories amid strong summer demand.

West Texas Intermediate crude oil for September delivery was last seen up US$0.95 to US$66.11 per barrel, while October Brent oil was up US$0.92 to US$68.56.

In its weekly survey, the American Petroleum Institute reported U.S. oil inventories fell by 4.2-million barrels last week, while the consensus analyst estimate expected a drop of 1.8-million barrels, according to Oilprice.com. The Energy Information Administration will release official inventory data later on Wednesday morning.

The report shows strong demand but comes as supply is on the rise, with OPEC on the weekend agreeing to end the return of 2.2-million barrels per day of production cuts with a final 548,000 bpd tranche of supply to market in September, even as the global economy slows amid U.S. tariff wars. However threatened U.S. secondary sanctions on buyers of Russian oil are countering some supply worries.

"Crude prices are staging a small rebound following a four-day slump, with Trump's threat about secondary sanctions on Russian importers of oil receiving some attention despite reports that Russia is considering offering him an olive branch. Overall, the tariff rollouts, softening US economic data, and rising OPEC+ production may curb any fresh upside attempts," Saxo Bank noted.

Source: MT Newswires