[NEW YORK] Global oil prices moved modestly higher on Wednesday as traders weighed a small gain in US inventories and a Federal Reserve report that supported expectations of a December interest rate hike.
US benchmark West Texas Intermediate (WTI) for delivery in December edged up eight cents to US$40.75 a barrel on the New York Mercantile Exchange.
Brent North Sea crude for January delivery, the global benchmark for crude oil, rose to US$44.14 a barrel in London, up 57 cents from Tuesday's settlement.
The latest US Department of Energy oil data showed another rise, albeit smaller than expected, in commercial stockpiles in the world's top oil consumer.
Crude oil inventories rose by 300,000 barrels to 487.3 million barrels in the week ended November 13, the highest level recorded for this time of year, but well below expectations of a two-million-barrel build. Compared with a year ago, supplies were nearly 28 per cent higher.
"Oil prices have remained mostly unchanged on account of this report. Inventories rose far less than analysts' expectations, but traders may have been expecting a modest decline in inventories," said Thomas Nichols of Moody's Analytics.
WTI briefly dipped below US$40 a barrel after the oil data, a level it has not closed below since late August.
Several analysts wondered whether the US$40 resistance level would hold much longer. Jason Schenker of Prestige Economics said the market remains "under pressure both from fundamentals of high supplies and the slowing US economy and China manufacturing."
The market appeared to brush off the minutes of the Federal Reserve's October policy meeting, which showed that most participants expected to begin raising interest rates at their December 15-16 meeting.
Investors have been betting on a December liftoff since the Fed's policy makers, in their post-meeting statement, put a hike on the table at the next meeting, a view reinforced by Fed Chair Janet Yellen in testimony to Congress.