News Column

Crude Oil Ends Lower As Supply Concerns Ease

July 9, 2014

WASHINGTON (Alliance News) - US crude oil slipped for a ninth straight day to end at a near seven-week low Wednesday, on easing concerns of supply disruption from the Middle East with reports of increased production and export from Libya. Oil prices plummeted despite an Energy Information Administration weekly report showed crude oil stockpiles in the US to have declined, albeit less than expected last week.

Earlier today, a report from the US Energy Information Administration showed US crude oil inventories to have dropped 2.4 million barrels in the week ended July 4, with analysts anticipating a decline of 3.0 million barrels. The EIA report showed US crude oil inventories at 382.6 million barrels, end last week.

Gasoline stocks rose by 0.7 million barrels last week, while analysts anticipated a drop of 1.0 million barrels. Inventories of distillate, including heating fuel, rose 0.2 million barrels, with analysts looking for an increase of 1.2 million barrels.

Late Tuesday, an American Petroleum Institute report showed crude inventories to have declined by a less than expected 1.7 million barrels in the week ended July 4.

Concerns of disruption of crude oil supplies over the ongoing conflict in the Middle East eased, after reports indicated that rebels controlling oil shipment ports will give up control of terminals which have remained closed for about a year. Libya is expected to provide crude of about 0.5 million barrels per day.

Reports indicate the Iraqi conflict will likely remain confined to north of the country also drove the prices downward.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, dropped USD1.11 or 1.1% to close at USD102.29 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for August delivery scaled a high of USD103.60 a barrel intraday and a low of USD102.10.

On Tuesday, crude oil futures ended lower, extending losses to an eighth successive session, amid easing fears of production disruption in Iraq and exports from Libya.

The dollar index, which tracks the US unit against six major currencies, traded at 80.12 on Wednesday, down from its previous close of 80.17 late Tuesday in North American trade. The dollar scaled a high of 80.23 intraday and a low of 80.02.

The euro traded higher against the dollar at USD1.3625 on Wednesday, as compared to its previous close of USD1.3612 late Tuesday in North American trade. The euro scaled a high of USD1.3643 intraday and a low of USD1.3604.

In economic news, Chinese consumer prices inflation slowed in June from a 4-month high, as food prices increased at a slower rate, a report from the National Bureau of Statistics showed Wednesday. Nevertheless, the increase was slightly below the consensus estimate.

Consumer prices increased 2.3% year-on-year in June following the 2.5% increase in May. Economists had expected prices to rise 2.4%.

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Source: Alliance News

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