Oil prices rise on US inventory data

15th January 2014, Comments 0 comments

Global oil prices rose Wednesday on news of a much bigger-than-expected drop in US crude stockpiles, indicating firm demand in the world's biggest economy.

New York's main contract, West Texas Intermediate (WTI) for delivery in February jumped $1.70 to $94.29 a barrel.

Brent North Sea crude for February gained 79 cents to $107.18 in late London deals.

The US Department of Energy said commercial crude inventories fell by 7.7 million barrels in the week ending January 10. That compared with analyst expectations for a decline of 800,000.

"US inventories showed a fall of 7.66 million barrels over the past week, well outside expectations... which should keep a floor under prices in the short term and has helped pull prices sharply higher," said Michael Hewson, chief analyst at traders CMC Markets.

Global economic growth is set to rise this year, supporting demand for crude oil.

The World Bank on Tuesday raised its growth forecasts for the global economy, but warned of potential volatility in capital flows as the United States withdraws its stimulus.

In its latest Global Economic Prospects report, the World Bank said that both high-income and developing countries appeared to be "finally turning the corner five years after the global financial crisis".

Global economic growth was estimated to hit 3.2 percent this year, accelerating from a 2.4 percent annual pace in 2013.

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© 2014 AFP

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