Oil hits 2-month high ahead of EIA's weekly report

Oil prices continued to rise as the US market opened on Wednesday, for the second day in a row, and hit 2-month highs after the release of preliminary data on US crude inventories that showed a large drop, and ahead of the EIA's weekly report.

US crude rose 1.1% to the highest since November 11 at $82.24 a barrel, after opening at $81.36, and hit a low at $81.19, and Brent crude rose nearly 1% to the highest since November 10 at $84.44 a barrel, after opening at $83.59, and hit a low at $83.54.

The US crude gained 3.6% yesterday, and Brent crude rose 3.25%, in the first daily gain in 3 days, and the largest daily gain since last December 27.

These gains came thanks to the US dollar's drop against a basket of major currencies, and data showing that OPEC Plus output was less than specified during December, due to a slowdown in production in Nigeria and Libya.

The American Petroleum Institute reported in preliminary data that the US crude inventories fell 1.1 million barrels during the week ending January 7, while analysts forecast a drop by 1.6 million barrels.

The total US commercial inventories fell to 419 million barrels, which is the lowest level since the week ending September 17, in a positive sign of the US domestic demand.

The US Energy Information Administration's official report will be released later today, amid forecasts for inventories to drop by 2.1 million barrels.

While the US output was unchanged last week, with the total at 11.8 million barrels per day, the highest level since the week ending May 1, 2020.