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

22 Nov 2017 5:32 am
   By Kevin Kingsbury 

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.

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.

By comparison, the U.S. Energy Information Administration is expected to report that crude stockpiles declined by 1.5 million barrels in the week ended Nov. 17, according to the average estimate of analysts and traders surveyed by The Wall Street Journal.

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."

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

(END) Dow Jones Newswires

November 22, 2017 00:32 ET (05:32 GMT)

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