Forexpros – Crude oil futures rallied to the highest level since June on Wednesday, after a government report showed that U.S. crude supplies fell broadly in line with expectations last week.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD102.08 a barrel during U.S. morning trade, soaring 2.65%.
It earlier rose by as much as 2.85% to trade at USD102.24 a barrel, the highest since June 9.
Crude prices traded at USD101.66 prior to the release of the Energy Information Administration data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories fell by 1.1 million barrels in the week ended November 11, broadly in line with expectations for a decline of 1.2 million barrels.
U.S. crude supplies fell by 1.4 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 337.0 million barrels as of last week, remaining in the upper limit of the average range for this time of year.
Total motor gasoline inventories increased by 1.0 million barrels, confounding expectations for a 1.0 million barrel drop, after falling by 2.1 million barrels in the preceding week.
Oil prices found further support after the U.S. Department of Labor said the consumer price index dropped 0.1% in October. Analysts had forecast CPI would be flat last month after rising 0.3% in September.
The decline potentially gives the Federal Reserve more leeway to introduce further stimulus measures to boost the U.S. economy.
Separately, the Federal Reserve said that industrial production rose by 0.7% in October, beating expectations for a 0.4% gain, after falling by 0.1% in the previous month.
Meanwhile, concerns over Italy’s debt woes lingered as the yield on the country’s 10-year bond hovered close to the 7% threshold widely seen as unsustainable, despite the European Central Bank supporting the regional bond by purchasing Italian and Spanish government debt.
A spokesman for German Chancellor Angela Merkel said earlier that new Italian Prime Minister Mario Monti needs to put into practice austerity pledges made by the outgoing Italian government, in order to quickly restore market confidence.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery eased up 0.17% to trade at USD112.39 a barrel, with the spread between the Brent and crude contracts narrowing to USD10.31 a barrel.
The gap between the two contracts is well off the record high of USD27.88 a barrel it hit in mid-October.
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