Oil prices rally before US inventory data

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Crude prices jumped on Wednesday as investors awaited the release of energy inventory data in the United States, the world's biggest oil-consuming nation.

New York's main contract, light sweet crude for August delivery advanced $1.30 to $98.80 a barrel.

Brent North Sea crude for September delivery grew $1.25 to $118.31 in London midday trade.

The US Department of Energy was to publish its weekly energy inventory figures at 1430 GMT, with analysts expected the data to show that crude stockpiles dropped last week.

Ahead for the figures, traders digested better-than-expected housing data in the United States.

"We have seen that investor confidence was boosted from the US housing data," Ker Chung Yang, an analyst with Phillip Futures, told AFP.

Data released on Tuesday by the Commerce Department showed US housing starts jumped 14.6 percent from May to an annual rate of 629,000 units.

That was much better than expected by analysts who had predicted an average 570,000 starts for last month.

Global markets were also given a lift after US President Barack Obama on Tuesday threw his weight behind a plan to slash the country's deficit that could see it avoid a default.

Traders have also been looking ahead to Thursday's emergency summit of eurozone leaders as they seek ways to prevent a default by Greece that could potentially have destabilising effects on larger European economies.

Oil dealers are concerned that a default in the United States or Greece could trigger financial upheaval and an economic slowdown, cutting into global energy demand.

© 2011 AFP

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