Oil prices rise for 2nd day, helped by drop in supply

Oil prices edged higher for a second day on Wednesday after data showed U.S. crude inventories fell more than expected last week, easing worries about oversupply that have dragged on markets in recent sessions.

Brent crude was up 57 cents, or 0.8 percent, at $74.01 a barrel by 0623 GMT. The global benchmark settled 38 cents higher on Tuesday.

U.S. West Texas Intermediate rose 27 cents, or 0.4 percent, to $68.79, having risen nearly 1 percent in the previous session.

U.S. crude and fuel stockpiles fell more than expected last week, industry group the American Petroleum Institute (API) said on Tuesday.

Reports that China will increase infrastructure spending also helped reduce concerns that U.S.-China trade tensions will dent the country's demand for oil.

"Prices are moving higher after the API reported a more massive draw than analysts had expected," said Stephen Innes, Head of Trading, APAC at brokerage OANDA.

The market has also been supported by a report from the International Monetary Fund about skyrocketing inflation in Venezuela, limiting its ability to boost oil output, Innes said.

"Venezuelan oil production has already plummeted to a new 30-year low of 1.5 million barrels a day in June," he said.

U.S. crude inventories fell by 3.2 million barrels in the week to July 20 to 407.6 million barrels, compared with analyst expectations for a decrease of 2.3 million barrels.

Crude stocks at the Cushing, Oklahoma, delivery hub dropped by 808,000 barrels, the API said. Refinery crude runs declined by 60,000 barrels per day.

Gasoline stocks fell by 4.9 million barrels, compared with analyst expectations in a Reuters poll for a 713,000-barrel drop.

Official figures from the U.S. Department of Energy's Energy Information Administration are due at 10:30 a.m. EDT (1430 GMT) on Wednesday.

(Reporting by Aaron Sheldrick; editing by Kenneth Maxwell and Richard Pullin)