Oil Up Above $56 on Lower US Stockpiles

Oil Up Above $56 on Lower US Stockpiles
Oil Up Above $56 on Lower US Stockpiles

Oil rose above $56 a barrel on Wednesday after industry data showed US crude inventories fell unexpectedly and as concerns eased about a resurgence in coronavirus cases in China, the world’s second-biggest oil user.
Industry group the American Petroleum Institute said US crude inventories fell by 5.3 million barrels. Analysts had expected them to rise. 
Brent crude climbed 51 cents, or 0.9%, to $56.42 a barrel. US West Texas Intermediate crude rose 41 cents, or 0.8%, to $53.02, CNBC reported.
“Oil prices are inching higher this morning amid data pointing to an unexpected drop in US crude stocks,” said Stephen Brennock of broker PVM.
Brent is near an 11-month high of $57.42 reached on Jan. 13, having recovered from a 21-year low below $16 in April due to a demand recovery particularly in China and huge supply cuts by OPEC and its allies, known as OPEC+.
“Oil continues consolidating,” said Jeffrey Halley of brokerage OANDA. “The Saudi Arabian cuts, OPEC+ compliance above 85% and an insatiable demand from Asia means that oil has seen its cyclical lows for 2021.”
In focus later will be the result of the US Federal Reserve’s two-day policy meeting. Analysts expect the central bank to stick to its dovish tone to help speed the economic recovery.
Still, rising coronavirus infections in places like Britain and United States are limiting gains, and China has recently grappled with a coronavirus resurgence.

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