RTRS: Oil rises near $60 as API says U.S. crude stocks fell
Oil rose toward $60 a barrel on Wednesday, after hitting a six-month high the previous day, after a U.S. inventory report showed an unexpected drop in crude stocks in the world's top consumer.
U.S. crude inventories fell 3.1 million barrels last week, the American Petroleum Institute said on Tuesday, against a forecast of a 1.4 million-barrel increase in a Reuters poll of analysts.
"The unexpected draw in crude oil stocks in the APIs last night is clearly behind this move," said Christopher Bellew, oil broker at Bache Commodities in London.
"Although crude stocks are high, there is an incentive to hold stocks with low interest rates and big contangos (discounts for prompt oil). So it looks as if oil has achieved some sort of equilibrium even though the recession is still with us."
U.S. crude for June was up 80 cents at $59.65 a barrel. It climbed to an intraday peak of $60.08, the highest since November, on Tuesday. London Brent crude rose 69 cents to$58.63.
Oil was also buoyed by a weaker U.S. dollar, which slid to a four-month low against a basket of currencies as growing optimism about the global economy curbed demand for the greenback as a safe haven.
Traders were waiting for the U.S. Energy Information Administration's (EIA) data on inventories at 1430 GMT (10:30 a.m. EDT) to confirm the report of a fall in crude stocks. Dealers consider the EIA to provide a more complete snapshot of supplies.
April retail sales data and March business inventory figures due later in the day would also provide more clues on the health of the U.S. economy.
Adding to positive sentiment was data that showed Chinese refinery output accelerated in April and posted a near-record high on daily basis as refiners stepped up supplies amid a recent big drawdown in inventories.
Coupled with the second-highest ever daily crude imports last month, signs point to a strong rebound in fuel demand for the world's second-biggest oil consumer.
The market shrugged off data showing China's industrial output rose less than expected last month. China's factory output rose 7.3 percent in April from a year earlier, below analysts' 8.3 percent forecast.
Oil has plunged from a record high above $147 a barrel hit last July, but a rally in stock markets over the last few months has helped lift crude almost 80 percent from a January low of $32.70 a barrel.
