Prices of oil go higher due to lower-than-expected U.S. crude inventory rise

Buoyed by the Saudi Energy Minister Khalid al-Falih’s comments, prices of oil ascended on Wednesday. The International benchmark, Brent crude futures, were traded at $64.36 per barrel –  2.6% or $1.64 higher than the previous settlement. Meanwhile, the United States West Texas Intermediate went higher by 2.4%, or $1.41, and settled at $60.60 per barrel.

Prices of oil were boosted by Khalid al-Falih’s speech, in which he mentioned that he would rather leave the market slightly short of supplies than withdraw the ongoing supply cuts too early. Michael Wittner, managing director and global head of oil research at Societe Generale, said that the statements given by the Saudi Energy Minister strongly signified that OPEC did not intend to let prices go below $60 Brent.

In addition, a lower than expected rise in U.S. crude inventories had a positive effect on the prices of the black gold. According to the Energy Information Administration, U.S. crude inventories climbed to 1.8 million barrels the previous week, which was lower than the expected increase of 2.8 million barrels.

British pound falls due to robust U.S. dollar

The British pound rallied towards $1.39 on early trade but settled back at 1.3801 right after the U.S. consumer price Index data was released. U.S. inflation data made analysts and investor believe there was a strong possibility for a sooner-than-expected interest rate hike.

Accordingly, the dollar was able to rise against the its British counterpart but quickly declined and settled at 88.94 .DXY. against its major currency rivals. Alessio de Longis, a portfolio manager at Oppenheimer Funds in New York mentioned in a speech that they are in an period in which the greenback presents mediocre performances despite hawkish tendencies towards an interest rate hike. 

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