Yesterday, the Federal Reserve's rate setting committee reported that the central bank intended to leave interest rates unchanged at their current low levels. Notable, in and of itself, but markets' reaction was subdued in anticipation of the historic first-ever press conference which was held shortly after the press release, presided over by the head of the Federal Reserve. Chairman Bernanke essentially sets the stage for a prolonged period of QE and low rates.

Those comments triggered a significant market reaction, including the further broad decline of the U.S. Dollar and a hike in oil prices in Asian trading, with WTI crude oil futures contracts striking a new 31-month high. Some market players said that oil investors moved swiftly to position themselves as the U.S. Dollar sell-off was expected to drive oil prices higher.

Analysts point out that with the price rise, the gap between futures contracts on the NYMEX-traded West Texas Intermediate and London-traded Brent crude is narrowing further. Recently, WTI crude for June delivery sold higher at $113.25 a barrel, while Brent crude sold at $125.56 a barrel. Some oil analysts expect that the upward momentum for crude oil prices is likely to continue through the year's end, and are targeting WTI oil prices to rise to $120 long before then.

Also supporting higher oil prices is the recent news that crude inventories in the U.S. were well higher than analysts' forecasts, rising to 363.1 million barrels, an increase of 6.2 million. Analysts had forecast an increase of only 900,000 barrels. One oil analyst noted that such bullish positioning reinforces market perception that the gasoline market on the East Coast is tightening. Data shows, in fact, that gasoline supplies in the East Coast market are nearly 11.5% below the past 3 years' average.

On the eToro trading floor, sentiment among eToro's oil traders was bullish in favor of buying by a ratio of 14 buyers to 6 sellers. On market the Oil continues to trade in elevated level trading around the 112-113 range with its long term trajectory marking the 120$ as the next target.