Updated on
Summary World oil prices rose on expected drop in US crude stockpiles.
Oil prices rose Wednesday, boosted by a sharper than expected drop in US crude stockpiles that sparked hopes for stronger demand in the worlds biggest oil-consuming country.The US Federal Reserves decision to keep monetary policy unchanged, announced in the afternoon after a two-day meeting, was widely expected but disappointed some investors who had hoped for additional economic stimulus.New Yorks main contract, light sweet crude for September, added 85 cents to settle at $88.91 a barrel.In London trade, Brent North Sea crude for delivery in September advanced $1.04 to $105.96 a barrel.For analyst Rich Ilczyszyn at iiTrader, the New York market had been very quiet all day -- nobody was waiting for anything dramatic from the Fed.The trader said the market was on tenterhooks ahead of Thursdays European Central Bank policy meeting. The ECB has been under pressure to take stronger action to address the eurozones sovereign debt crisis and economic downturn.Remarks by ECB president Mario Draghi in a post-meeting news conference will be the big statement of this week, Ilczyszyn said.Traders focused Wednesday on the US Department of Energys weekly energy report, which delivered a positive sign on the demand front.The DoE said that US crude stockpiles fell by 6.5 million barrels in the week ending July 27, instead of the much smaller drop of 800,000 barrels expected by analysts polled by Dow Jones Newswires.In the prior week, US crude reserves had climbed by 2.7 million barrels, after having hit a 22-year high in early July.Oil prices moved up higher, off their two-week lows as US commercial crude inventories showed a decrease of 6.5 million barrels, said Sucden analyst Brenda Kelly.But, Kelly said, in the absence of any (monetary policy) easing, the slowdown in China and Europe could keep prices fairly subdued in the near term.
