- POSTED: 19 Dec 2013 04:47
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Oil prices rallied on Wednesday after a bullish US oil inventory report and a decision by the US Federal Reserve to scale back an aggressive bond-buying programme.
NEW YORK: Oil prices rallied on Wednesday after a bullish US oil inventory report and a decision by the US Federal Reserve to scale back an aggressive bond-buying programme.
US benchmark West Texas Intermediate for January delivery rose 58 cents to $97.80 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for February delivery jumped $1.19 to $109.63 a barrel in London.
The gains came after the US Energy Information Administration reported that US oil inventories fell by 2.9 million barrels, above the 2.7 million projected by analysts according to a Wall Street Journal survey.
"The numbers were bullish," said Andy Lebow, senior vice president at Jefferies Bache.
Lebow said the data also demonstrated that petroleum products demand rose 4 percent in the four-week period ending December 13 compared with the year-ago figures.
"Demand is truly good - it's improving," Lebow said.
The Fed also scaled back its bond-buying programme by US$10 billion to US$75 billion per month.
The Fed "sees the improvement in economic activity and labour market conditions over that period as consistent with growing underlying strength in the broader economy," it said in a communique following a meeting of the Federal Open Market Committee.
The much-anticipated decision initially sent oil prices slightly lower shortly after the 1900 GMT announcement. But the commodity soon moved back into positive territory.
"It appears, looking at the data, that the US economy is improving," Lebow said.