The US crude continued to rise as the US market opened on Wednesday, rising more than 2%, to extend gains for the second straight day and hit a 1-week high, after the American Petroleum Institute showed in preliminary data a sharp decline in the crude inventories, and ahead of the Energy Information Administration's weekly report.

US crude (WTI) rose 2.6% to $39.39 a barrel, after opening at $38.39, and hit a session-low of $38.38. 

US crude gained 2.9% yesterday, after strong data on China's industrial production. 

The American Petroleum Institute (API) revealed yesterday in preliminary data that the US crude inventories fell by about 9.4 million barrels in the week ending September 11, the seventh weekly drop in the last 2 months, beating expectations of a rise by 1.6 million barrels.

The total inventories fell to 496.6 million barrels, the lowest level since the week ending April 10, which is a positive sign on demand and consumption levels in the US.

While the US Energy Information Administration (EIA) will release today the official data on inventories and production levels in its weekly report, with forecasts for inventories to rise 2.1 million barrels.

As for the US production, it fell 300,000 barrels during the past week, to a total of 10.0 million barrels per day, with production resuming after a wave of hurricanes and storms hit the Gulf of Mexico and led to the suspension of 1.1 million bpd.

At 12:30 GMT, the US economy released its reading for the retail sales index, which rose by 0.6% in August, lower than forecasts of 1.1%, while the index rose by 1.2% in July. 

The core reading (excluding car sales) rose by 0.7%, also lower than forecasts of 1%, while the previous reading was at rose 1.9%. This data is negative for the US economy.

The US dollar fell on Wednesday, to resume its losses after taking a breather yesterday, as demand for the US currency slowed due to negative expectations for the US Fed, which comes ahead of the US retail sales reading for August, and the Federal Reserve's monetary policy decisions.

The dollar index fell 0.3% to 92.81 points, after opening at 93.08, and hit an intraday-high of 93.19.

The index gained less than 0.1% yesterday, posting its first gain in the last 3 days.

Demand slowed down for the US currency as the best alternative investment due to improved market sentiment and investors focusing on high risk currencies.

This came while concerns eased about a liquidity drain in markets, especially after tech stocks rebounded in Wall Street, and most other global stock markets rallied.

The greenback also came under pressure of growing bets that the Fed will announce extra monetary stimulus to support the US economy from further damages by the coronavirus crisis.

Investors are anticipating the release of the US retail sales, which is one of the most important gauges of consumer spending that accounts for 70% of the US GDP, and delivers key insight on the US economy's recovery from the coronavirus effects.

The monthly retail sales reading will be released at 12:30 GMT, with forecasts for a rise by 1.1% in August vs. 1.2% in July, and the core reading for the same index (excluding car sales) is expected to also rise by 1% vs. 1.9%.

The US monetary policy statement and interest rate decision will be unveiled at 18:00 GMT, amid expectations for the Fed to maintain rates unchanged at 0.25% and Fed Chairman Jerome Powell will deliver a speech at 18:30 GMT.

Investors are in search of cues and insight over the future of the Fed's stimulus plans, as it will be the first appearance of Fed Chair Jerome Powell since he unveiled the US monetary policy historic shift at the Jackson Hole Economic Symposium that is aimed at allowing inflation to run above the Fed’s previous target to support the economic recovery from the coronavirus impact.

European stocks rose on Wednesday, to head for the fourth straight daily gain, hitting a 2-week high on improved market sentiment thanks to positive news about coronavirus vaccines, strong economic data in China and ahead of the Federal Reserve's monetary policy decisions.

The Stoxx Europe 600 index rose 0.5% as of 10:10 GMT, and hit the highest since September 3 at 373.15 points, after it closed higher by 0.7% yesterday, thanks to a strong rally by retail companies.

The pan European index opened higher today, to head for the fourth straight daily gain, and hit a 2-week high, with most of the major European markets and sectors seeing green today.

The retail sector saw the largest gains in Europe today, rising over 1.7%, to extend gains for the second straight session on upbeat corporate earnings in Q2.

The US Federal Open Market Committee is wrapping up its policy meeting today, which will be the first meeting after Fed Chair Jerome Powell unveiled the US monetary policy historic shift of allowing inflation to run above the Fed’s previous target, and pledged to hold the rates for a long period of time. 

The US monetary policy statement and interest rate decision will be unveiled at 18:00 GMT, and Fed Chairman Jerome Powell will deliver a speech at 18:30 GMT, amid expectations for the Fed to keep its pessimistic outlook for the US economy.

S&P 500 futures rose over 0.5%, after the index closed higher by 0.5% yesterday at Wall Street, in its third straight daily gain.

Back to Europe, the Euro Stoxx 50 index added 0.4%, France's CAC 40 rose 0.3%, Germany's DAX added 0.4%, and the UK's FTSE 100 rose 0.2%.