Crude oil rose over $2.20 a barrel in New York trading today snapping a three-day losing streak, due to a big drop in U.S. inventories and also an overall improved market sentiment on optimism that Europe’s banks will be helped.
Data from the U.S. Energy Information Administration showed a steep drop in imports last week which pushed crude inventories to their lowest since January. Stockpiles fell by 4.7 million barrels last week more than the forecast 1.0 million and dropped from the previous published inventories of 1.9 million.
Oil and other commodities, as well as stocks, also found support from news European finance ministers agreed to examine a way to beef up banks’ balance sheets and prevent a full-blown financial crisis.
U.S. data confirmed the economy was narrowly avoiding another recession and globally growth in both the manufacturing and services sector accelerated slightly last month according to JPMorgan’s Global All-Industry Output index.
Despite Wednesday’s gains, some analysts remained downbeat on the prospects for oil and other commodity prices with anxiety about the state of euro zone finances and the outlook for fuel demand.
Data showed the euro zone’s services sector shrank for the first time in two years in September as new orders dried up, stoking fears that the region’s economy could be heading back into recession.