On Thursday, oil nearly jumped by one dollar and moved closer to US$117/barrel extending gains of three dollars in the previous session, as the depletion of crude and gasoline stocks in the US provoked supply concerns. Nevertheless, analysts predict that a tight credit market in the U.S. could limit a sharp rise in prices. Nonetheless, oil is still far away from this year's peak at more than US$147/barrel it hit in mid-July, and analysts said it's unlikely the market could move anywhere close to that level soon.
As per the Energy Information Administration (EIA), USA's crude stocks dropped 400,000 barrels, while gasoline inventories fell by 6.4 mln barrels in the week to August 8. Distillates stocks also unexpectedly declined with the depletion coming after companies shut U.S. Gulf Coast facilities due to Tropical Storm Edouard. As per the U.S. Transportation Department, Americans drove 12.2 bln miles, or 4.7%, less in June YOY. As a result, OPEC has also made an announcement that it will consider cutting the oil output.
The conflict between Russia and the U.S. over Georgia also supported prices. Georgia has alleged that Russia has broken cease-fire in their six-day-old conflict on Wednesday, and U.S. demanded Moscow resolve a situation that has strained relations with the United States. On the flipside, Russia accused the U.S. of playing a perilous game by supporting Georgia. Also, three BP pipelines - one each of oil and gas running through Caspian Sea to Georgia and Baku-Tblisi-Ceyhan oil pipeline - were shut last week.
As per the Energy Information Administration (EIA), USA's crude stocks dropped 400,000 barrels, while gasoline inventories fell by 6.4 mln barrels in the week to August 8. Distillates stocks also unexpectedly declined with the depletion coming after companies shut U.S. Gulf Coast facilities due to Tropical Storm Edouard. As per the U.S. Transportation Department, Americans drove 12.2 bln miles, or 4.7%, less in June YOY. As a result, OPEC has also made an announcement that it will consider cutting the oil output.
The conflict between Russia and the U.S. over Georgia also supported prices. Georgia has alleged that Russia has broken cease-fire in their six-day-old conflict on Wednesday, and U.S. demanded Moscow resolve a situation that has strained relations with the United States. On the flipside, Russia accused the U.S. of playing a perilous game by supporting Georgia. Also, three BP pipelines - one each of oil and gas running through Caspian Sea to Georgia and Baku-Tblisi-Ceyhan oil pipeline - were shut last week.
