Metals News
Oil rises on sharp inventories decline
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10:00AM
Source:SMM

NEW YORK, July 11 (Xinhua) -- Crude prices rose on Wednesday as U.S. oil inventories declined sharply last week.

The Energy Information Administration said that U.S. crude inventories surprisingly fell by 4.7 million barrels in the week ended July 6, almost four times the median forecast. The declining inventories, along with a big contraction in the crude output of Iran, the second biggest oil exporter of OPEC, pushed the crude prices higher.

Due to sanctions from the western countries, Iran's oil production has dropped to a record low of 3.2 million barrels a day, according to the latest data.

Meanwhile, after a big loss on Tuesday, there was also a technical need for oil to rebound.

On Wednesday, the U.S. Federal Reserve released minutes of its June 19-20 policy meeting, which also weighed a lot on the crude markets.

The minutes showed that 11 out of 12 Fed officials voted to keep the central bank's easy-money policies in place. But the Fed officials seemed split over whether and when the central bank should launch another major stimulus program, known as the QE3. Only 4 of the 12 officials mentioned more quantitative easing in their individual forecasts.

The Fed officials agreed that the U.S. economy has continued to expand moderately since the previous meeting, though a variety of economic indicators showed smaller gains than anticipated.

Crude pared gains as the Fed offered no clear hints on the QE3.

Light, sweet crude for August delivery rose 1.90 dollars, or 2. 26 percent, to settle at 85.81 dollars a barrel on the New York Mercantile Exchange. In London, Brent crude for August delivery also gained 2.26 dollars, or 2.31 percent, to close at 100.23 dollars a barrel.

 

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