Oil rises for second straight day after US inventories drop

Oil prices rose on Thursday, to head for the second straight daily gain, after a drop in the US crude inventories to a nearly 6-month low, which raised hopes for a demand recovery.

US crude rose 1.4% to $40.44 a barrel, after opening at $39.89, and hit a session-low of $39.75, while Brent rose 0.9% to $42.54, after opening at $42.14, with a low of $41.84. 

US crude gained 1.9% yesterday, and recovered from a 2-week low of $38.44, and Brent rose 3.25%, thanks to improved risk appetite.

Oil prices have lost around 7% during September, and posted the first monthly loss in 5 months, on profit-taking and renewed concerns about global demand.

The US Energy Administration reported yesterday a drop in commercial inventories by 2 million barrels in the week ending September 25, passing estimates of 1 million.

Total inventories fell to 492.4 million barrels, the lowest since April 3 in a positive sign for the US demand. 

US output held unchanged last week at 10.7 million bpd, while remaining the world's top producer.