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Oil prices surge to 2016 highs on U.S. inventory drawdown

News Date: 27/4/2016 02:36:47
Oil prices jumped to multi-month highs yesterday and kept up the rally today after a private survey showed a surprise 1.1 million barrels drop in U.S. crude inventories, compared to expectations of a 2.4M rise, which helped ease tensions of a supply glut in the world's largest crude consumer.

Brent crude futures added sixty cents, or 1.30% to trade at $46.15 a barrel, a more than four-month high, while U.S. West Texas Intermediate (WTI) crude futures rose 53 cents, or 1.16% to hover around $44.55 a barrel.

The dollar index on the other hand, which measures the greenback against a basket of six major currencies, was flat at 94.44, pressured by expectations the Federal Reserve will keep interest rats unchanged and delay hiking rates to later in the year.

Euro capitalized on the dollar's weakness, edging up 0.10% to trade at 1.1307, while Japan's yen inched up 0.13% against its American peer to hover around 111.16. Sterling however eased 0.07% to 1.4573, pressured by Brexit fears.

Investors wait for an array of data later today, with a preliminary reading on British GDP expected to showed a 0.4% q/q growth in the first quarter of this year, slowing down from the previous quarter's 0.6% rise, which wouldn't help the pound much in its current struggles.

From the U.S., the Federal Reserve will announce its official decisions on interest rates and monetary policy, expected to keep rates unchanged at their range of 0.25% - 0.50% for the time being after hiking them from zero in December.

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