Oil is extending gains on Wednesday after a big drop in US oil stockpiles. Brent oil futures rose by 0.88%. Likewise, WTI crude was moving higher in the Asian session. The ruble is losing ground against the US dollar.
On Wednesday, oil futures went up on a bigger-than-expected draw in US oil inventories. Besides, solid data on factory activity in the US and China fueled optimism for a recovery from the coronavirus pandemic, thus boosting investor risk appetite. In the early trade, Brent oil futures rose by 0.88% to 45 dollars 98 cents per barrel, while West Texas Intermediate crude futures gained 0.87% and settled at 43 dollars 13 cents per barrel.
On the New York Mercantile Exchange, WTI futures for October were trading at 42 dollars 86 cents per barrel. The US dollar Index futures, which measure the dollar’s value against a basket of six major currencies, added 0.25% to trade at 92.36.
In the morning session on Wednesday, WTI oil futures for October edged higher to trade at 43 dollars 09 cents per barrel.
At the time of this release, WTI found support at the level of 42 dollars 36 cents and resistance at 43 dollars 57 cents.
According to the American Petroleum Institute, US crude inventories fell by 6.4 million barrels in the week to August 28 and ended up at 501.2 million barrels. Analysts had expected a smaller drop of 1.9 million barrels.
Hiroyuki Kikukawa, the general manager of research at Nissan Securities, said that a sharp drop in crude stocks prompted purchases in oil futures.
Meanwhile, manufacturing activity in the US reached its highest level in more than a year and a half in August. So, a rise in new orders provided support to Wall Street and the oil market.
China’s factory activity also accelerated at the fastest pace in nearly a decade in August. The activity has been boosted by an increase in export orders for the first time this year.
On the supply front, oil output by the Organization of the Petroleum Exporting Countries rose by about 1 million barrels per day in August.
In the meantime, the ruble is depreciating against the US dollar in the morning trade. Against the euro, the ruble is holding steady thanks to the overall weakness of the single European currency on Forex today.
On Moscow Exchange, the ruble advanced against the US dollar by 27 kopecks in the early session. So, the dollar/ruble pair was trading at the level of 73.85. On Tuesday, the weighted average rate of the dollar came in at 73.58.
The difference between Brent crude and WTI contracts was 2 dollars 80 cents per barrel. In the course of the session, the ruble is likely to dip lower against its American rival.
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