WTI oil trading firm over $88 on huge US oil supply fall

WTI oil prices open today’s trading session firm over $88 a barrel, as the latest weekly EIA oil supply report showed that US oil inventories saw it’s biggest fall for eight years.

Latest WTI Oil Price

US Light crude oil futures for January 2011 delivery was trading at $88.40 a barrel, 07.20 GMT this morning on the NYMEX.

EIA Figures Surprise Market

The Energy Department’s Energy Information Administration said Wednesday that crude inventories fell 9.9 million barrels last week, the largest drop since 2002, analysts had forecast a drop of 3 million barrels. The surprise figures had traders piling back into buying oil futures.

Last week, the IEA, in its monthly Oil Market Report revised it’s 2010 global oil demand growth forecast up by 130,000 barrels per day to 87.4 million barrels per day, and revised up growth forecast for 2011 by 260,000 barrels to 88.8 million barrels per day.

“The recent tightening in market conditions has been more significant than we had expected, leading us to now anticipate a steeper rise in oil prices over 2011.” National Australia Bank said in a report.