Oil Rallies on Inventory Drawdown and Chinese Output

Oil prices rose on Wednesday, lifted by a report of a drop in U.S. crude inventories and declining production in China, while an upbeat OPEC statement on its planned output cut also supported the market.

A slightly weaker dollar boosted oil as well, traders said, as it makes fuel purchases cheaper for countries using other currencies, potentially spurring demand.

U.S. West Texas Intermediate (WTI) crude oil futures were trading at $50.73 per barrel at 0326 GMT, up 44 cents, or 0.87 percent, from their last settlement.

International Brent crude futures were at $52.14 a barrel, up 46 cents, or 0.89 percent.

“The American Petroleum Institute crude inventory numbers were released … this has given early Asian trading a bullish start,” said Jeffrey Halley, senior market analyst at OANDA in Singapore.

Reuters

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.