2020.12.3019:30:00UTC+00Crude Oil Futures Settle Higher After Data Shows Sharp Drop In Inventories

Oil prices moved higher on Wednesday, lifted by data showing a larger than expected decline U.S. crude inventories in the week ended December 25.

A weaker dollar too contributed to oil's uptick.

West Texas Intermediate Crude oil futures for February ended up $0.40 or about 0.8% at $48.40 an ounce.

Brent crude futures were up $0.27 or 0.52% at $51.50 a barrel a little while ago.

Data released by the Energy Information Administration (EIA) this morning showed crude inventories in the U.S. fell by 6.1 million barrels last week, significantly more than an expected drop of about 3.8 million barrels.

A report released by the American Petroleum Institute (API) late Tuesday said U.S. crude inventories fell 4.79 million barrels last week to 492.9 million barrels, much higher than an expected drop of about 3.1 million barrels.

According to Baker Hughes' report, the number of U.S. oil rigs rose by 3 this week to 267. Baker Hughes releases its data usually on Friday, but this week, it has released it early as Friday is a holiday for New Year's Day.

Meanwhile, traders continue to look ahead to the OPEC meeting, scheduled to take place on January 4. The group and its allies, including Russia, are set to discuss tapering oil output cuts.