Commodities: Crude rises after API data, Saudi output hints

Crude futures are ahead Wednesday afternoon thanks to data revealing an easing in US oil stores, and hints by Saudi Arabia about further production cuts.

Industry body American Petroleum Institute (API) last night reported a draw of 1.3m barrels in US crude inventories, versus market expectations for a build of 125,000.

However, the market is looking ahead to oil inventories data from the US government's Energy Information Administration later on Wednesday.

At 15:04 BST, Nymex-priced WTI crude was up 0.22% to $53.32 a barrel. Intercontinental Exchange-traded Brent was up 0.18% up to $56.33 a barrel.

Chris Beauchamp, chief market analyst at IG, said Saudi Arabia had dropped another hint about further production cuts, providing yet more strength to the currently unstoppable rally in crude.

"Riyadh is not the only Opec member to think such cuts are needed, but it is the one whose view really counts, and thus we might see others fall into line in due course," said Beauchamp.

"It's tough being bearish on crude, and it looks set to get a lot tougher, as US crude tops $54 for the first time in over a month."

Naeem Aslam, chief market analyst at Think Markets UK, said the matter of compliance with a Saudi-led production cut was a factor likely to weigh on crude's price.

"Markets are not expecting 100% compliance on this affair, anything over 80% would be good enough to draw down inventories," said Aslam.

"The important factor is that both Opec and non-Opec (oil producers) need to show their patience as this supply glut is not going to fade overnight."

Henry Croft, research analyst at Accendo Markets, said crude prices also noted crude's rise on optimism Saudi Arabia would convince other Opec members to extend their production cuts.

"However weaker metals prices on account of slowing Chinese Producer inflation are capping gains for commodities producers," he said.

At about 15:37 GMT, on Comex, gold was up 0.15% to $1276.1 an ounce. Silver added 0.33% to $18.32 an ounce and copper fell 1.36% to 257.25 cents a pound.

Safe-haven gold saw a run higher on Tuesday, after US President Donald Trump heightened tensions between the US and North Korea. This only added to the political unease between the US and Russia over Syria.

"Gold has broken the key resistance area $1263. This validates a bullish reversal pattern with an upside potential at $1337," said SwissQuote.

It said hourly support was at $1263, with hourly resistance now found at $1280.

"In the long-term, the technical structure suggests that there is a growing upside momentum," said SwissQuote. "A break of $1392 is necessary to confirm it."

On London Metals Exchange, three-month industrial metals were mostly lower. Zinc fell 1.83%, tin lost 1.36% and aluminum slipped 0.29%, while copper was up 0.35%.