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Oil rallied amid USD rally, awaits US supply data

FXStreet (Mumbai) - Oil prices rallied despite the broad based USD strength ahead of the weekly supply data in the US.

At the time of writing, the Brent futures were up 77 cents or 1.5% higher at USD 49.56/barrel, while WTI futures were up 95 cents or 2% at USD 47.09/barrel.

The USD index rose 0.4% on Fed rate outlook, however, oil prices have remained resilient. The traders now look forward to the weekly inventory data in the US. The first to report is the American Petroleum Institute, which will be followed by the government data tomorrow released by the Energy Information Administration (EIA).

As per Reuters poll, the EIA figure on Wednesday is likely to show oil stockpiles rose by 2.7 million barrels last week; up for a sixth consecutive week as supply outstrips demand.

The oil rally today seems to have been triggered by expectations that the slowdown in the major oil exporters may force them to cut production. The latest Saudi PMI was reported today at record lows as the private sector suffered from the drop in oil prices.

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