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Oil Futures Up Sharply As Inventories Drop

Crude oil prices are sharply higher Wednesday morning, extending recent gains, after data from the American Petroleum Institute a sharp weekly drop in stockpiles and on mild optimism about economic recovery.

Recent strong industrial production and retail sales data from China, and the impact of Hurricane Sally on oil production in the Gulf of Mexico region also contribute to oil's uptick. A weaker dollar is contributing as well to oil's rise.

The dollar index is down by about 0.22% at 92.85, ahead of the Federal Reserve's monetary policy.

The American Petroleum Institute's report said U.S. crude stockpiles fell 9.5 million barrels in the week ended September 11. The report also said gasoline inventories were up 3.8 million barrels in the week and distillate stockpiles dropped by 1.1 million barrels.

West Texas Intermediate Crude oil futures for October were up $0.82 or 2.14% at $39.10 a barrel, after rising to $39.42 earlier.

Brent crude futures were gaining $0.87 or 2.15% at $41.40 a barrel.

The official crude inventory data from Energy Information Administration is due out at 10:30 AM ET. The data is expected to show a drop of about 1.8 million barrels in crude inventories last week.

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