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WTI oil futures rally above $54 ahead of weekly inventory data

Published 04/15/2015, 03:56 AM
Updated 04/15/2015, 03:56 AM
© Reuters.  U.S. oil futures extend rally ahead of weekly supply data

Investing.com - West Texas Intermediate oil futures rose for the fifth consecutive session on Wednesday, amid speculation weekly supply data due later in the session will show U.S. crude inventories rose at a slower pace than expected last week.

On the New York Mercantile Exchange, crude oil for May delivery touched an intraday peak of $54.22 a barrel, the most since February 17, before trading at $54.15 during European morning hours, up 85 cents, or 1.6%.

A day earlier, Nymex oil jumped $1.38, or 2.66%, to close at $53.29 amid speculation an ongoing collapse in rigs drilling for oil in the U.S. will result in lower production.

Wednesday's government report was expected to show that U.S. crude oil stockpiles rose by 4.1 million barrels last week, while gasoline stockpiles were forecast to decline by 0.2 million barrels.

After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories increased by 2.6 million barrels in the week ended April 10, slowing from a gain of 12.2 million in the preceding week.

The report also showed that gasoline stockpiles fell by 4.1 million barrels, while distillate stocks declined by 566,000 barrels.

U.S. oil futures have been well-supported in recent sessions amid mounting expectations that U.S. shale oil production has peaked and may start falling in the coming months.

Elsewhere, on the ICE Futures Exchange in London, Brent oil for June delivery tacked on $1.05, or 1.76%, to trade at $60.87 a barrel after hitting a daily high of $61.00, a level not seen since March 6.

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On Tuesday, London-traded Brent prices rose 77 cents, or 1.3%, to settle at $59.81.

Meanwhile, the spread between the Brent and the WTI crude contracts stood at $6.65 a barrel, compared to $6.52 by close of trade on Tuesday.

Elsewhere, the U.S. dollar recovered some ground lost after a weaker-than-expected U.S. retail sales report on Tuesday.

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.25% to trade at 99.26 early on Wednesday after hitting a low of 98.58 on Tuesday.

Investors looked ahead to U.S. industrial production data later in the session for further indications on the strength of the economy and the timing of an interest rate hike.

In China, official data released earlier showed that the nation's economy grew 7.0% in the first quarter, in line with forecasts and down from growth of 7.3% in the preceding quarter. It was the slowest pace since the global financial crisis in 2008.

A separate report showed that industrial production rose by an annualized rate of 5.6% in March, below expectations for a 6.9% increase and following a gain of 6.8% in the preceding month.

Data on retail sales and fixed asset investment also fell short of forecasts, indicating that China needs to act to prevent a further slowdown in the economy.

The U.S. and China are the world’s two largest oil consuming nations.

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