Oil rises on positive demand signals

Oil rose from a five-month low on positive demand signals, including a decline in U.S. inventories and signs the Federal Reserve is preparing to cut interest rates. U.S. crude rose 1.3 percent to $70 a barrel on Wednesday after rising from its lowest since late June. Global benchmark Brent was near $75. U.S. crude inventories fell more than twice as much as forecast last week, according to the Energy Information Administration. The Fed held interest rates steady for its third straight meeting, sending the clearest signal yet that its aggressive tightening campaign is over. Chairman Jerome Powell said policymakers are now turning their focus to when to lower borrowing costs as inflation continues to slow. “The dovish outcome from the FOMC meeting came as a surprise to some who had expected the Fed to maintain its tough stance. It has triggered risk appetite that oil prices have been able to support,” said Yeap Jun Rong, market strategist at IG Asia. Crude oil is still down more than a quarter from its peak in late September, driven by rising exports from non-OPEC countries and fears of a worsening demand outlook. In addition, the market is skeptical about whether the Organization of the Petroleum Exporting Countries and its allies will fully comply with deeper voluntary supply cuts. Investors will be looking ahead to the International Energy Agency’s monthly report on Thursday, the last of three key market outlooks this week. OPEC continued to forecast a significant shortfall in oil supplies in the coming quarter, an outlook that contradicts its own efforts to rein in output.