Crude prices jumped in Asia on Wednesday after a strong drop inU.S. crude stocks reported by industry that signaled surprise demand and bolstered sentiment after plans by OPEC to curb production.
On the New York Mercantile Exchange, crude futures for November delivery rose 1.19% to $49.27 a barrel. On the ICE Futures Exchange in London, the November Brent contract gained 1.06% to $51.41 a barrel
The American Petroleum Institute reported a draw of 7.6 million barrels in crude stocks last week, well below the build of around 1.5 million expected, marking a third straight week of declines with only one increase since the end of August. Gasoline inventories rose 2.9 million barrels while distillates fell 1.3 million and stocks at Cushing declined by 400,000 barrels.
On Wednesday, the U.S. Department of Energy will report its figures for crude and refined product stocks last week.
Overnight, U.S. oil futures slid lower on Tuesday, weighed by a stronger U.S. dollar but the commodity remained supported as the oil production freeze deal announced last week by OPEC continued to boost investors’ confidence.
Despite initial skepticism, traders seemed globally optimistic after the Organization of the Petroleum Exporting Countries said last week that it would cut output to between 32.5 million barrels per day (bpd) and 33.0 million bpd from about 33.5 million bpd.
It was the first such deal since 2008. Further details are to be finalized at
OPEC’s next policy meeting in November.
OPEC’s next policy meeting in November.
But the U.S. dollar strengthened broadly as upbeat manufacturing activity and consumer sentiment data boosted optimism over the strength of the economy and supported the case for a rate hike by the Federal Reserve before the year end.
Oil prices typically weaken when the U.S. currency strengthens as the dollar-priced commodity becomes more expensive for holders of other currencies.
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