Oil prices rally on soaring shares, drop in crude stockpiles

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Oil prices rallied on Wednesday in line with rebounding stock markets and after official data revealed an unexpected drop in US crude inventories.

New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in November jumped $2.80 to $78.47 a barrel.

Brent North Sea crude for November added $2.20 to $101.99 in late London deals.

"US crude prices (like equities) have also rebounded from their lows yesterday after a surprise drop in US stockpiles," said Michael Hewson, market analyst at CMC Markets.

WTI Tuesday sunk to its lowest level in a year and Brent tumbled below $100 a barrel on heightened concerns over the eurozone debt crisis.

"Crude oil prices rebounded, supported by ... a strong rebound in the equity markets," said Sucden brokers analyst Myrto Sokou.

European stock markets rallied sharply on Wednesday after the European Commission said EU nations were building a co-ordinated plan to recapitalise banks to avoid contagion from the eurozone debt crisis.

Oil prices found further support after figures showed US crude stockpiles dived 4.7 million barrels last week, compared with analyst forecasts for a rise of 700,000 barrels.

The data suggested firmer demand for energy in the United States, the world's biggest consumer of oil.

The figures were published a day after private industry body, the American Petroleum Institute, reported on Tuesday that US oil stocks tumbled by three million barrels last week.


© 2011 AFP

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