Oil Prices Extend Rally on Hopes of Falling U.S. Inventories

By Kevin Kingsbury Features Dow Jones Newswires

Oil prices rallied in Asian trading on Wednesday, extending a recent pullback as an industry group's reading showing a drop in U.S. crude inventories raised hopes for a government report due later in the day.

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Light, sweet crude for January delivery climbed 1.6% at $57.75 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, rose 0.6% to $62.95 a barrel.

The American Petroleum Institute said late Tuesday that its data showed domestic oil supplies fell by 6.4 million barrels last week.

The drop in inventories would follow a surprise increase a week earlier, which pushed oil futures down from their highest levels since mid-2015.

Still, oil prices remain rangebound ahead of a meeting of the Organization of the Petroleum Exporting Countries next week. The cartel's members and non-OPEC producers, including Russia, are expected to extend a deal to reduce production and bring down the global supply.

"We think there is some danger of a short-term market disappointment," Standard Chartered cautioned, adding that "reality seems more likely to disappoint than surprise to the upside."

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Write to Kevin Kingsbury at kevin.kingsbury@wsj.com

(END) Dow Jones Newswires

November 22, 2017 00:47 ET (05:47 GMT)