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Oil prices rally on falling U.S. inventories

Xinhua, June 30, 2016 Adjust font size:

Oil prices rose sharply on Wednesday as government data showed U.S. crude inventories dropped for a consecutive sixth week.

The Energy Information Administration said in its weekly report on Wednesday that U.S. crude oil inventories fell 4.1 million barrels to 526.6 million in the week ending June 24.

Oil prices suffered the biggest two-day loss since February on Friday and Monday as the Brexit vote spurred market concerns about the economic stability of the UK and euro zone, triggering massive risk aversion among investors.

Crude prices recovered on Tuesday and Wednesday as European Union leaders gathered in Brussels for a two-day meeting to discuss Britain's decision to leave the bloc, raising speculations that policy makers may take measures to limit the economic fallout.

Oil prices were also supported by a weaker U.S. dollar on Wednesday. The dollar index, which measures the greenback against six major peers, was down 0.51 percent at 95.755 in late trading.

A weaker U.S. dollar increased investor sentiment, which made the dollar-denominated oil more attractive for holders of other currencies.

The West Texas Intermediate for August delivery gained 2.03 U.S. dollars to settle at 49.88 dollars a barrel on the New York Mercantile Exchange, while Brent crude for August delivery added 2.03 dollars to close at 50.61 dollars a barrel on the London ICE Futures Exchange. Enditem