Oil Rises on US Inventory Drawdown

Oil prices were up as much as 2 percent on Wednesday, reacting to the possibility of another surprise weekly drop in U.S. inventories amid an industry strike in Norway that threatened to cut North Sea crude output.

The American Petroleum Institute, a trade group, reported a 7.5 million barrel drop in U.S. crude inventories for the week ended Sept. 16, versus a 3.4 million-barrel drop forecast by oil market analysts polled by Reuters. [API/S]

The U.S. Energy Information Administration (EIA) will issue official inventory data for last week at 10:30 a.m. EDT (1430 GMT). [EIA/S]

In Norway, more than 300 oil service workers went on strike as wage talks broke down, hitting operations of five large subcontractors to the domestic oil and gas industry.

Also supporting crude prices was speculation that OPEC and oil producers will agree to some sort of a production-freeze deal in talks in Algeria next week, and that the Federal Reserve will not hike U.S. interest rates in a policy decision due at 2:00 p.m. EDT (1800 GMT).

Brent crude futures LCOc1 were up 70 cents, or 1.6 percent, at $46.58 per barrel by 9:43 a.m. EDT (1343 GMT).

U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 95 cents, or 2.1 percent, to $45.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza