US crude ends higher, taking Fed's taper in stride
Crude oil rose on Wednesday, as investors took in stride a decision by the U.S. Federal Reserve to trim its monetary stimulus that could eventually tame commodities prices..
After months of speculation, the Fed announced it would curb its massive crisis-era stimulus by $10 billion a month. Fed Chairman Ben Bernanke is expected to give details later on how much further the central bank could go. Stimulus has supported assets such as commodities, and restrained the dollar.
Strong demand for Brent from Mediterranean refiners in the absence of Libyan supply also supported the international benchmark.
U.S. crude held gains after data from the U.S. Energy Information Administration (EIA) showed crude inventories in the world's largest oil consumer dropped 2.9 million barrels to 372.3 million barrels, compared with forecasts of a 2.3 million barrel draw. The higher-than-expected draw was countered by data showing refinery runs fell 1.1 percent from the previous week.
A steady run of firm U.S. economic data in recent weeks has raised speculation the Fed could reduce its bond buying, known as quantitative easing or QE, at its policy meeting ending later in the day.
For more information on commodities prices, please click here.