Weekly US crude oil production has fallen during the past few weeks and this is one of the main reasons the market has rallied, says Saxo Bank head of commodities Ole Hansen.

There is a slowdown in production by non-Opec nations and the market has started to rebalance, says Hansen. He adds that the reason why markets are higher today is because investor demand remains strong while the US dollar is still weak. 

Hansen previews the US inventory report due later on Wednesday. The American Petroleum Institute’s weekly inventory data published yesterday noted a drop of 1.1 million barrels, but Hansen says that general expectations ahead of Wednesday’s report are for a rise of 1.5m barrels.