Crude prices was seen advancing for a second day on Thursday, boosted by the surprising Fed decision to postpone the tapering of its stimulus program and also driven by the US inventories dropping to the lowest level since March 2012.
The West Texas Intermediate deliveries for November edged up 0.46% at $108.59 a barrel on New York Nymex at the time of writing, while the European benchmark crude Brent jumped 0.31% higher to $110.94 a barrel.
Both crudes saw its bigger gains in three weeks on Wednesday as the US dollar weakened..
The US crude stockpiles saw an unexpected drop of 4.37 million barrels to 355.6 million in the week ended September 13, the Energy Information Administration confirmed on Wednesday.
Recent data published showed that the stockpiles at Cushing, the largest US oil-storage hub, dropped 861,000 barrels to 33.3 million, the lowest since February 2012. Gasoline inventories declined by 1.63 million barrels last week, while distillate supplies lost 1.08 million.
Regardless of the eased worries in the Middle Eastern region, Goldman Sachs, investment bank warned that the global crude supplies are still an issue. Analysts from the bank forecasted the loss from Libya (the largest oil reserve in Africa), and Iraq (Organization of Petroleum Exporting Countries (OPEC) second largest crude producer) is expected to surpass 100 million barrels by the end of this month.
“It comes at a time when total inventories in the OECD are nearly 80 million barrels lower, and nearly all major regional markets are far tighter, as evidenced by strong physical grade differentials and nearly universally backwardated markets,” Goldman analysts said in a note. “This fundamental tightness will support prices and we maintain our near-term Brent price target of $115.00 a barrel,” he added.
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