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Crude prices finally hit the US$90 mark for only the second time since October 2008 in electronic trading in on Tuesday on the back of an announcement from the American Petroleum Institute (API) saying that US crude inventories had dropped sharply last week.
According to the institute, crude inventories fell 5.8 million barrels in the week through December 17 compared to a Reuters poll of analysts showing a 2.3-million-barrel-drop.
The US Energy Information Administration (EIA) is expected to weigh in on the matter on Wednesday with its own prediction which experts fear could show a further drop in US inventory levels.
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The API also reported an unexpected 2.9 million barrel fall in gasoline supplies due to refinery outages on the eastern seaboard of the US, compared with analyst expectations for an increase of 1.4 million barrels.
Exceptionally cold weather has driven up heating fuel demand in northern Europe and the United States.
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The harsh winter weather in China, which is the world’s second-biggest oil consumer after the United States, has also helped to push up demand.
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