Text size:

  • Small
  • Normal
  • Large

Oil rallies above $73 on surprise inventory drop

Oil rose above $73 per barrel on Wednesday after several days of falls, supported by industry data showing a big drop in US crude stocks and the dollar's weakness.

LONDON // Oil rose above $73 per barrel on Wednesday after several days of falls, supported by industry data showing a big drop in US crude stocks and the dollar's weakness. The American Petroleum Institute (API) said in a report late on Tuesday that crude inventories in the world's top oil consumer fell 5.8 million barrels last week, bucking expectations for a rise, as refiners boosted fuel production.

US crude for January delivery rose 88 cents to $73.50 per barrel by 0856 GMT, after falling $1.31 on Tuesday. NYMEX crude, which hit its lowest level since late November at $72.43 on Monday, has lost more than 7 per cent this month. London Brent crude gained 78 cents to $75.97. Losses over the last five days have been partly driven by a recovery in the dollar. Oil is priced in dollars so a rise in the currency makes fuel more expensive to most consumers.

The dollar index against major currencies was down 0.3 per cent in early London trade on Wednesday. "The oil market is seeing a correction after several days of heavy falls," said David Wech, head of energy studies at JBC Energy in Vienna. "The inventory data is clearly a factor." The oil market also received some support from Saudi Oil Minister Ali al Naimi, who said Gulf economies were strong despite anxieties over financial strains in the region, easing fears Dubai's debt problems would hamper economic recovery.

"The soundness and growing diversification of our regional economy will help restore calm following the turbulence of the moment," he told a petrochemicals conference in Dubai. The API data on Tuesday showed US gasoline inventories fell by 753,000 barrels, while distillates, which include heating oil and diesel, rose by 1 million barrels. However, crude oil stocks at Cushing, Oklahoma, the delivery point for oil futures traded on NYMEX, rose 1.5 million barrels, helping push down the price of front-month crude futures, creating the deepest front-month discounts since August.

Analysts say they expect the contango to deepen further over the next few weeks with no return to backwardation until well into 2010 as US oil demand stays relatively weak. Further pointers on US stockpiles will come from weekly Energy Information Administration (EIA) data due later on Wednesday. An expanded Reuters poll has forecast a 600,000-barrel rise in US crude oil stocks. US crude oil futures surged to a year high of $82 per barrel in October, from below $33 last December.


Back to the top

More articles

Editor's Picks

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Above, the private pool of Ocean Heights' five-bedroom penthouse flat. Courtesy Christie’s International Real Estate

In pictures: Penthouse flat is height of Dubai luxury living

A five-bedroom penthouse in Ocean Heights in Dubai Marina is on sale for Dh25 million and comes with a private pool and an unparalleled view of Dubai.

 The cooling towers of the Temelin nuclear power plant near the Tyn nad Vltavou in Czech Republic. The country wants to continue expanding nuclear energy capacity despite cancelling a tender to build two new units. David W Cerny / Reuters

In pictures: Best business images for the week to April 17, 2014

Here are some of the best business images for the week to April 17, 2014.

 Three generations of the Hakimi family tend to their stall Crawford Market in Mumbai. Subhash Sharma for The National

In pictures: Shopper’s delight at Crawford Market in Mumbai

Crawford Market is an old British-style covered market dealing in just about every kind of fresh food and domestic animal imaginable. Later on renamed Mahatma Jotirao Phule, the market remains popular among locals and visitors by its old name, taken from Arthur Crawford who was the first municipal commissioner of the city.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.


To add your event to The National listings, click here

Get the most from The National