Oil climbs above $56

Oil cheered the weekly US inventory data in a rebound after a sharp drop yesterday.

Crude touched a low today of $54.76 but was trading nearly a dollar higher just before the data. The market was braced for a large build in supplies after the American Petroleum Institute announced a nearly 6 million rise in inventories late yesterday.

Instead, official stockpiles climbed 1.379 million barrels. That set off a further 75-cent rally in oil to $56.52. The jump goes a long way towards erasing yesterday's decline, which was the worst since Sept 30.

Oil climbs above $56

In the bigger picture, yesterday's breakdown is still dominant but this undoubtedly clouds the picture. The rebound today keeps a series of higher lows intact and if there's a fresh push it could challenge $58 again.

Oil daily

Fundamentally, it's all about China-US talks and the Dec 5 OPEC meeting.