Shrinking U.S. supplies fuel small rally on crude oil price charts

Crude oil prices rose on the New York commodity index today, paring down some of the earlier losses, as continually declining crude inventories in the U.S. finally took effect, instilling traders with hope that the sector has enough support to rebound despite Europe’s increasingly dismal economic state.

Current crude oil prices stand more than 0.5% higher, recouping a portion of the 1.9% loss they took on yesterday, which was brought on by a significantly disappointing bond auction in Germany. Crude oil stockpiles in Cushing, Oklahoma, the primary storage hub for the fuel in the U.S. now sit at their lowest mark since the first month of 2010. Goldman Sachs reacted to the news by raising their crude oil futures expectations for the first quarter of 2012.

Analysts have stated however, that though shrinking supplies provide a nice underlying source of support for crude oil price charts, the commodity oil will need far more than that to maintain leads on the sector indexes. Despite the fact that investors seem more confident with the fuel, few expect it to break past the $103 per barrel mark that it reached last week.

West Texas Intermediate crude oil prices for delivery in January gained 50 cents to settle at $96.67 per barrel in electronic trading on the New York Mercantile Exchange. Futures are up 5.7% for the year. Trading floors in the U.S. are currently closed for Thanksgiving.

Brent crude oil prices for January settlement closed the day on a 67 cent gain at $107.69 per barrel on the London-based ICE Futures Exchange. The European contract saw additional support stem from the rapidly escalating geo-political unrest in Iran, Syria and Egypt.

The debt crisis in Europe and China’s recent decision to halt its expansion efforts until more clement global economic times continues to affect crude oil.