Oil prices up following US stockpile decline, weaker currency
September 23, 2016, 12:05 am TWN
SINGAPORE -- Oil prices climbed Thursday, building on the previous day's gains following a bigger-than-forecast fall in U.S. stockpiles, and a plunge in the dollar after the Federal Reserve kept interest rates on hold.
The commodity rallied Wednesday after the U.S. Department of Energy said inventories had tumbled by more than six million barrels last week, almost twice as much as expected, indicating a pick-up in demand in the world's top economy.
"This drop is expected to alleviate glut concerns and will further support the crude oil prices," CMC Markets market analyst Margaret Yang said.
At about 0300 GMT, the U.S. benchmark West Texas Intermediate was up 45 cents to US$45.79, while Brent added 48 cents to US$47.31. Both contracts climbed more than 2 percent.
The gains were given extra momentum by the weaker dollar, which makes oil cheaper for people holding other currencies. While broadly expected, the decision to hold borrowing costs at ultra-low levels was cheered across global markets, sending equities and higher-yielding currencies soaring.
News that oil giants Saudi Arabia, Iran and Qatar met at OPEC headquarters in Vienna to discuss production cuts ahead of next week's informal producers' meeting in Algeria also provided strong support to the crude rally.