Commodities: Brent rally continues as inventories decline

Brent crude continued its rally higher on Wednesday, fuelled by a reduction in oil inventories from the US, which fell by 7.2m barrels, versus expectations for a smaller drop of 3.3m.

Investors have been keeping a close eye on oil recently, particularly after the OPEC meeting in Russia earlier this week, where Saudi Arabia committed to cap exports at 6.6m barrels per day in August and amid a continued reduction in US oil inventories and increasing production of US shale.

Spot Brent saw some volatile moves in the hour the inventories figure was released with a low of $50.24 and a high of $51.17. Managing to hold onto those gains, the black gold was up on the day as at 1700 BST by 1.33% to $51.06.

Gold moves overnight saw Asian traders sell the precious metal ahead of any shocks the FOMC statement may offer up, taking the metal from $1,250 to a low of $1,244. UK traders picked up the baton from those low areas, helping the metal to rally to a day high of $1,249 as at 1500 BST.

From then on, moves were subdued as traders awaited the release of the FOMC statement at 1900 BST, with spot gold trading steady at $1,248.

Wednesday saw copper rise for a fourth day to the highest level in more than two years on expectations of solid Chinese growth and curbs on scrap imports to China. Prices were further buoyed by tight supply forecasts and a weaker dollar.

The base metal managed a day high of $6,403 by 0600 BST, while the low for the day was hit by 1200 BST at $6,264. Robin Bhar, head of metals research at Societe Generale, said: "I would advise to sell rallies from here unless we close above the recent high of $6,400."

Reporting by Imran Allana.