On Wednesday, oil prices increase, boosted by a report of a decline in U.S. crude inventories and dropped production in China, while an upbeat Organization of the Petroleum Exporting Countries (OPEC) statement on its planned production cut also supported the market.
A slightly weaker greenback increased oil as well, as it makes fuel purchases inexpensive for countries using other currencies, potentially spurring demand, according to sources.
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%, from their previous settlement.
International Brent crude futures were at $52.14 a barrel, increase 46 cents, or 0.89%.
“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.
U.S. crude stockpiles drop 3.8 million barrels in the week to Oct. 14, to 467.1 million barrels, the API reported late on Tuesday.
Later on Wednesday, the U.S. Energy Information Administration (EIA) is scheduled to release official crude and fuel storage data.
Traders stated oil was supported by Mohammed Barkindo, secretary general of the Organization of the Petroleum Exporting Countries (OPEC), stating he is confident regarding the prospects of a planned production cut after an OPEC meeting on Nov. 30.
“I am optimistic we will have a decision,” he said.
In its first production cut deal since 2008, Organization of the Petroleum Exporting Countries said it idea to reduce output to 32.50 million to 33.0 million barrels per day (bpd), in comparison with record production of 33.6 million barrels per day (bpd) in September.
The group also expects non OPEC producers, especially Russia, will cooperate in a reduction.
On Wednesday, in China, a raft of economic and trade data was released.
While economic progress was in line with expectations, at a yearly growth rate of 6.7% in the 3rd quarter, its oil figures were supportive of higher oil prices, traders stated.
China processed 43.8 million tonnes (10.7 million bpd) of crude oil in September, up 2.4% from a year ago, government data presented on Wednesday.
Within the same month, China’s oil output decline 9.8% to 15.98 million tonnes (3.89 million bpd), in its steepest drop in 19 months.
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