Investing.com - U.S. oil futures rallied to a one-week high on Wednesday, after government data showed that U.S. oil supplies fell significantly more-than-expected last week, easing concerns over a slowdown in demand.
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On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in March traded at USD94.08 a barrel during U.S. morning trade, up 1.4%. Nymex oil prices traded at USD93.63 a barrel prior to the release of the supply data.
Crude oil prices rose to a session high of USD94.12 a barrel earlier, the strongest level since January 8. The March contract settled 0.84% higher on Tuesday to end at USD92.78 a barrel.
Nymex oil futures were likely to find support at USD91.84 a barrel, the low from January 14 and resistance at USD94.17 a barrel, the high from January 8.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 7.7 million barrels in the week ended January 10, compared to expectations for a decline of 0.6 million barrels.
Total U.S. crude oil inventories stood at 350.2 million barrels as of last week.
The report also showed that total motor gasoline inventories increased by 6.2 million barrels, above expectations for a gain of 2.5 million barrels.
U.S. oil prices received an additional boost after data showed that manufacturing activity in the New York-region improved at the fastest pace since May 2012 this month.
The Federal Reserve Bank of New York said that its general business conditions index jumped to 12.51 in January from a reading of 2.22 in December. Analysts had expected the index to rise to 3.75 in January.
A separate report showed that producer prices increased by a seasonally adjusted 0.4% in December, matching forecasts, after falling 0.1% in November. The core producer price index eased up 0.3% last month, above expectations for a 0.1% increase, after rising 0.1% in November.
The upbeat data helped bolster expectations that the economic recovery in the U.S. will continue to deepen this year and offset concerns over last week’s surprising poor nonfarm payrolls report for December.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for February delivery inched up 0.65% to trade at USD106.30 a barrel, while the spread between the Brent and U.S. crude contracts stood at USD12.22 a barrel.