Oil Rises On Inventory Data

Crude oil prices were up early on Wednesday on smaller U.S. inventories and hopes that a U.S. interest-rate cut will boost demand.

West Texas Intermediate crude for September delivery was last seen up US$0.58 to US$58.63 per barrel while near month Brent crude was US$0.55 higher at US$65.27.

In its weekly look at U.S. private oil inventories, the American Petroleum Institute said stockpiles fell by 6-million barrels last week to 443 million barrels. The U.S. Energy Information Administration will report its authoritative look at domestic inventories at 10:30 Eastern time with forecasts calling for a drop of around 2.5 million barrels.

The U.S. Federal Reserve is expected to conclude its two day meeting by announcing an cut to interest rates on Wednesday afternoon, with the market expecting a drop of of 25 basis points. The market is expecting the rate cut to spur economic activity and raise demand for fuel.

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