WTI oil trading higher on surprise US inventory drop

WTI oil futures open trading higher on Wednesday as the US American Petroleum Institute report that oil inventories in the United States dropped last week.

US Light crude oil futures for November 2010 delivery was trading at $76.53, 07.45 GMT on the NYMEX after closing at $76.25 yesterday.

Crude oil inventories fell 2.4 million barrels last week, the American Petroleum Institute said late Tuesday while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos had forecast an increase of 2.2 million barrels.

While oil supplies and the value of the US dollar are the main drivers of oil prices, some analysts are expecting that commodities such as oil, gold and silver may outperform other investments in coming years.

Commodities a Better Investment Than Stocks

“Investors currently struggle with the risks of deflation, low growth and extremely easy monetary policy in developed economies. We believe bonds and commodities represented far better investments than real estate and equities.” Bank of America Merrill Lynch said in a report.

WTI Oil Futures with Support Around $75

“Every time we try to push too far away from $75 towards the downside, the expectations for economic growth seem to hold the market, and once we push towards $78, the high oil supplies seem to cap the rally. You’ve found kind of a fair value here around $75.” said Gene McGillian, a broker and analyst with Tradition Energy.