Oil nears $50/barrel on inventory data, boosting stocks
By Caroline Valetkevitch
NEW YORK (Reuters) - Oil prices climbed to just shy of $50 a barrel on Wednesday after a sharper-than-expected fall in crude inventories, lifting energy shares and world stock markets.
Growing bets on a possible Federal Reserve rate increase as early as in June or July reduced demand for U.S. government debt.
Investors' expectations for higher borrowing costs have risen since last week's minutes from the central bank's April meeting signaled a June increase was on the table. Comments from policymakers and upbeat U.S. economic data in recent days have supported those views.
"What you're seeing is a recognition that this is going to happen and investors are getting more comfortable with it," said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia. "There's a recognition that economic growth is okay."
Energy Information Administration data showed U.S. crude stockpiles fell last week as imports dropped and refineries cut output. Brent LCOc1 settled up $1.13 at $49.74, while
U.S. crude's CLc1 settled 94 cents higher at $49.56.
World stocks markets rose for a second straight session, helped by energy shares including Chevron (CVX.N: Quote), up 1.6 percent, and bank shares, which benefit from higher interest rates.
The Dow Jones industrial average .DJI closed up 145.46 points, or 0.82 percent, to 17,851.51, the S&P 500 .SPX gained 14.48 points, or 0.7 percent, to 2,090.54 and the Nasdaq Composite .IXIC added 33.84 points, or 0.7 percent, to 4,894.89. Continued...