Oil up above $56 on lower U.S. stockpiles, drop in new Chinese COVID-19 cases | Reuters

Oil up above $56 on lower U.S. stockpiles, drop in new Chinese COVID-19 cases | Reuters

Oil rose above $56 a barrel on Wednesday after industry data showed U.S. crude inventories fell unexpectedly and as concerns eased about a resurgence in coronavirus cases in China, the world’s second-biggest oil user.

Industry group the American Petroleum Institute (API) said U.S. crude inventories fell by 5.3 million barrels. Analysts had expected them to rise. Official inventory figures are due at 1530 GMT from the Energy Information Administration. [EIA/S]

Brent crude climbed 51 cents, or 0.9%, to $56.42 a barrel at 0920 GMT. U.S. West Texas Intermediate (WTI) crude rose 41 cents, or 0.8%, to $53.02.

“Oil prices are inching higher this morning amid data pointing to an unexpected drop in US crude stocks,” said Stephen Brennock of broker PVM.

Brent is near an 11-month high of $57.42 reached on Jan. 13, having recovered from a 21-year low below $16 in April due to a demand recovery particularly in China and huge supply cuts by OPEC and its allies, known as OPEC+.