Oil rises on stabilizing ruble, US supply drop
New York (AFP) - World oil prices rallied somewhat Wednesday after the Russian ruble stabilized and the US reported lower crude inventories.
US benchmark West Texas Intermediate for January delivery gained 54 cents to $56.47 a barrel on the New York Mercantile Exchange.
European benchmark Brent oil for delivery in January advanced $1.17 to $61.18 a barrel in London.
John Kilduff, founding partner of hedge fund Again Capital, said traders were relieved that Russia's moves to stabilize its currency appeared to be working.
Russia said it would sell about $7 billion in foreign reserves to prop up the ruble. Other actions seek to ease access to foreign currency and protect banks from having to book losses that would weaken their financial strength.
"The market was worried about contagion in the eurozone and their economies" due to instability in Russia's markets, Kilduff said.
Russia's measures were "well received" by the market, he added.
Oil prices also received support from a report by the US Department of Energy that showed US crude inventories fell by 800,000 in the week ending December 12.
Despite Wednesday's gains, WTI finished well below its intra-session high of $58.97 a barrel.
Some of the retreat followed a US Federal Reserve policy announcement that lifted the dollar, said Gene McGillian, broker and analyst at Tradition Energy.
"The market is all over the place because of the uncertainty of the rebalancing of the global petroleum complex," McGillian said.
"As the day has worn on, the fears that have driven us to these five-year lows have reemerged and the market continues to hunt for a bottom."
