London: Oil rose above $76 a barrel on Wednesday as the dollar weakened and investors awaited a report on US inventories expected to show rising crude stockpiles and lower distillate supplies.
The dollar weakened, increasing the appeal of oil and commodities to some investors, and equities moved higher in Europe supported by an upward revision in the Federal Reserve’s US growth forecast in 2010.
US crude for January rose 45 cents to $76.47 a barrel by 2:16pm, after settling down $1.54 at $76.02 on Tuesday. Brent crude was up 64 cents at $77.10.
“There are a few little straws in the wind to help the market back up, such as better demand in China and the weak dollar,” said Christopher Bellew, a broker at Bache Commodities.
The dollar also supported gold, which struck a record high for a second time this week. Crude has more than doubled from below $33 in December, though the market is still far below its record of more than $147 hit in July 2008.
China’s apparent oil demand in October rose 10.3 percent from a year earlier, the seventh rise in a row, according to Reuters calculations based on official data on Monday.
Later on Wednesday, a report on US oil inventories from the Energy Information Administration (EIA) will give the latest snapshot of supplies, while economic data will further indicate the pace of recovery.
Traders will focus on whether the EIA confirms figures from industry group the American Petroleum Institute on Tuesday, which showed a 3.3 million-barrel rise in crude inventories. The EIA report is due at 9:00pm.
The EIA report is also expected to show a small decline in stocks of distillates, which include heating oil and diesel.
Oil markets have increasingly looked to economic data this year for signs of a global recovery to boost demand. US figures due later includes weekly jobless claims and October durable goods orders at 7:00pm.