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Oil rises 1% on inventory drawdown, EIA stockpile data ahead

Published 19/10/2016, 09:21
© Reuters.  Oil up 1% on inventory drawdown, EIA stockpile data ahead
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Investing.com - Oil prices rose on Wednesday, climbing around 1% boosted by an unexpected U.S. inventory drawdown and hopes for a planned output cut by major producers.

U.S. crude oil was up 52 cents or 1.09% at $50.84 a barrel at 8.08 GMT.

Global benchmark Brent futures were at $52.25 as barrel, up 57 cents or 1.08%.

Oil prices were boosted after the American Petroleum Institute said late Tuesday that U.S. crude oil stocks fell by a surprise 3.8 million barrels last week. The drawdown defied expectations for a build of 2.7 million barrels.

Official inventory data from the Energy Information Administration is due for release later Wednesday, with analysts forecasting a stockpile build of 2.4 million barrels.

Crude prices received an additional boost after the secretary general of the Organization of the Petroleum Exporting Countries said he is confident about the prospects of a planned production cut following an OPEC meeting on November 30.

OPEC reached an agreement to limit production to a range of 32.5 million to 33.0 million barrels per day in talks held late last month.

But many market analysts remain skeptical of the deal, amid uncertainty over how the agreement would be implemented.

Oil prices were also supported by the slightly weaker dollar. Oil is priced in U.S. dollars and becomes cheaper to holders of other currencies when the dollar weakens, underpinning demand.

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