Crude up after inventory drop

23 December 2009

Written by Kim Bardsley

Crude oil prices moved higher during the Asian trading session this morning (December 23rd) as traders reacted to yesterday's announcement that stocks of crude and other products such as heating oil fell last week.

The American Petroleum Institute (API) recorded a larger-than-anticipated inventories drop of 3.7 million last week, while gasoline stocks also fell unexpectedly.

Speaking to Reuters, Ben Westmore, commodities economist at National Australia Bank, said traders are now awaiting further demand figures from the Energy Information Administration (EIA).

"The API data [is bullish] and the market anticipates EIA data tomorrow to show reasonably significant drawdown in the crude stocks as well as in some of the oil products stocks," he said.

Crude oil prices enjoyed a late-stage rally during the US trading session yesterday, with the commodity closing for the day at $74.40 (£46.67) a barrel, up 68 cents.

By the time the European markets opened this morning, the commodity had gained another 20 cents on the barrel.

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