Oil Futures Settle Notably Higher After Inventory Data

Oil prices climbed higher on Wednesday after data showed a bigger than expected drop in U.S. crude inventories in the week ended December 8th, and on reports that a tanker was hit by gunmen in the Red Sea off Yemen’s coast.

OPEC+ lifted its estimate f 2023 global economic growth based on its latest monthly report released earlier in the day. The cartel expects oil demand to grow by 2.2 million barrels per day next year.

OPEC blamed the latest crude price slide on “exaggerated concerns” about oil demand growth.

West Texas Intermediate Crude oil futures for January ended higher by $0.86 or about 1.3% at $69.47 a barrel.

Brent crude futures were up $1.08 or 1.47% at $74.32 a barrel a little while ago.

Data released by Energy Information Administration (EIA) showed crude oil inventories in the U.S. dropped by 4.3 million barrels last week, as against an expected declined of about 0.7 million barrels.

Gasoline inventories increased by 0.4 million barrels, while distillate fuel stockpiles increased by 1.5 million barrels.

The Federal Reserve announced its widely expected decision to leave rates unchanged for the third consecutive meeting.

The projections provided by the Fed along with its monetary policy announcement also suggest the central bank plans to begin cutting rates next year.

In support of its dual goals of maximum employment and inflation at the rate of 2% over the longer run, the Fed said it decided to maintain the target range for the federal funds rate at 5.25 to 5.5%.

The accompanying statement said the decision came as economic growth has slowed from its strong pace in the third quarter, while inflation has eased over the past year.

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