Crude prices rise on unexpected U.S. inventories drop

09:04, December 16, 2010      

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Crude prices rose on Wednesday as U.S. crude oil inventories registered an unexpected drop last week.

The Energy Information Administration (EIA) said U.S. crude oil inventories fell sharply by 9.9 million barrels in the Dec. 10 week, mainly caused by a drop in oil imports and strong refinery demand.

The drop was the most in eight years, surprising the analysts and giving oil prices a boost.

On Wednesday, the economic data continued to be positive. According to the Federal Reserve Bank of New York's Empire State Manufacturing Survey, New York manufacturing activity rebounded this month. Data showed the Empire State's business conditions index jumped to 10.57 in December from -11.14 in November, while economists were expecting a much more modest gain. This made investors more confident in the recovery and lifted the oil prices.

Light, sweet crude for January delivery gained 34 cents to 88. 62 U.S. dollars a barrel on the New York Mercantile.

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