Oil hits record $94 on U.S. inventory slump

According to cnbc.com:

LONDON (Reuters) - Oil rallied to a record $94 a barrel on Wednesday after weekly data showed U.S. crude inventories unexpectedly slumped by 3.9 million barrels, countering expectations for an increase.

U.S. oil futures rose $2.89 to $93.27 a barrel by 1616 GMT, off lows of $88.92, on top of a $4 slide in the previous session.

London Brent gained $2.49 to $89.93.

Commercial stockpiles of crude oil in the United States fell by 3.9 million barrels to 312.7 million barrels in the week ended October 26, said the Energy Information Administration on Wednesday. Analysts had forecast a rise of 600,000 barrels in a Reuters poll.

"I am very surprised, the crude number is insanely bullish, it's a big drop, for the second week in a row," said Mike Wittner, global head of oil research at SocGen in London.

Supplies of distillates, which include heating oil and diesel fuel, were up 800,000 barrels at 135.3 million barrels, defying expectations for a 500,000-barrel decline.

Gasoline inventories rose 1.3 million barrels to 195.1 million barrels, countering projections for a drawdown of 100,000 barrels.

Oil prices may ease off over the next few days after investors who sold on Tuesday have covered their positions, said Tom James, head of commodities trading at Liquid Capital Markets in London.

"It's a short-covering rally triggered by the fall in stocks," James said. "With any other news, I would expect the market should come back off again."

- These "analyst" ought to be sacked... Sometimes they are too politically correct to avoid panic but the truth cannot be place better in the face of depleting resources. Anymore drop in stockpiles dues to OPEC "inability" to raise output or "unwillingness" to raise supply may cause more spikes in oil prices in future.

The next prediction will be a temporary drop in oil prices and even greater spikes...my previous prediction on the oil price to reach USD$95 by the end of this October is a near miss by $1 which is pretty close indeed.

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