Oil recovers from 2-week low ahead of EIA weekly report

Oil continued to rise with the opening of the US market on Wednesday to hold above the two-week low recorded earlier in the day, this comes supported by preliminary data showing a decline in US crude inventories for the fifth week in a row, amid investors' anticipation of the weekly report of the US Energy Information Administration (EIA) for official data on commercial inventories and production levels later today.

As of 12:45 GMT, US crude rose to $58.15 per barrel from $57.46, with a high of $58.34, and a low of $57.46.

US crude fell Tuesday by 3%, its third consecutive daily loss, hitting a two-week low of $57.09 per barrel, and Brent lost 2.7%, the biggest daily loss in two weeks.

In preliminary data, the American Petroleum Institute announced yesterday that the country's trade inventories fell by 1.4 million barrels in the week ending in July 12, the fifth consecutive weekly decline, below expectations of a decline of 2.7 million barrels.

According to the data, total US trade inventories fell to 459.6 million barrels, the lowest level since the week ending in April 19, in a positive sign of improved domestic demand in the world's top oil consumer.

Traders are looking for official data on commercial inventories and production levels later today, in the weekly report of the US Energy Information Administration (EIA), with expectations of a 3.6 million barrel drop in inventories.

As for the US production, it increased by about 100 thousand barrels per day in the previous week, the second weekly increase in a row, bringing the total to 12.3 million barrels per day, again close to its record level of 12.4 million barrels per day, as the United States is currently the largest oil producer in the world.