Oil prices rose for a fifth day on Wednesday, supported by a drop in U.S. inventories and investor expectations that the U.S. Federal Reserve will lower borrowing costs for the first time since the financial crisis more than a decade ago.
“The move has long been anticipated and represents a double boon for oil prices – on one hand, it should encourage U.S. oil demand and on the other, it will apply downward pressure on the dollar,’’ said PVM Oil Associates analyst, Stephen Brennock. Crude inventories fell by six million barrels to 443 million barrels in the week ended July 26, against a forecast for a drop of 2.6 million barrels in a Reuters’ poll of analysts.
Libya’s Sharara oilfield, the country’s largest, shut down on Tuesday after a problem with a valve on the pipeline linking it to the Zawiya oil terminal.