Oil rises after sharp drop in US crude inventories

Author: Agencies

Oil prices rose on Wednesday after an industry report showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world. Brent crude rose 33 cents, or 0.8%, to $41.60 a barrel by 0044 GMT after declining more than 1% on Tuesday. US crude was up 42 cents, or 1.1%, at $39.69 a barrel, having dropped by 1.1% in the previous session. US crude and gasoline stocks declined more than expected last week, while distillate inventories rose, data released by the American Petroleum Institute (API) late on Tuesday showed. Crude inventories dropped by 8.2 million barrels to 537 million barrels, against analysts’ forecasts for a draw of 710,000 barrels. “If the API estimates are vetted by the official government agency data due out tomorrow, this will be viewed as a definite bullish signal,” said Stephen Innes, chief global markets strategist at AxiCorp. “The reports could go a long way to easing some of those lingering inventory concerns,” he said. Inventory data from the US government’s Energy Information Administration is due out later on Wednesday.

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