Oil rises as stocks shrink

Oil rose after an industry report suggested U.S. inventories will decline. Oil rose after falling more than 2 percent on Tuesday, as industry reports pointed to a significant draw in U.S. crude stocks and rising tensions in the Middle East. Brent crude climbed to nearly $81 a barrel, while U.S. crude was below $79. The American Petroleum Institute reported last week that inventories had fallen by 5.2 million barrels, according to people familiar with the data. If confirmed by official figures due Wednesday, that would be the seventh consecutive weekly decline. The Organization of the Petroleum Exporting Countries also cut its forecast for global demand this year and next, citing downward revisions to China’s outlook. Citigroup analysts pointed to geopolitical and weather-related risks, while Goldman Sachs Group said financial demand for crude derivatives should recover from last week’s record low. Both banks say Brent could rise to the mid-$80s. Meanwhile, risks persist that an Iranian retaliatory attack on Israel could lead to a spike in oil prices. The US said the possibility of an attack was increasing and could come as soon as this week.