News Column

Crude Oil Ends Below USD95 After Supply Data

September 4, 2014

WASHINGTON (Alliance News) - US crude oil ended sharply lower on Thursday, after a weekly official oil report from the US Energy Information Administration showed crude stockpiles in the US to have dropped less than expected last week. The drop came amidst a strong dollar with some positive economic data out of the US

Earlier today, a report from the US Energy Information Administration showed US crude oil inventories to have dropped 0.9 million barrels in the week ended August 29, while analysts anticipated a decline of 2.0 million barrels. The EIA report showed US crude oil inventories at 359.6 million barrels, end last week.

Gasoline stocks dropped by 2.3 million barrels last week, with analysts anticipating a decline of 1.3 million barrels. Inventories of distillate, including heating fuel, rose 1.3 million barrels last week, with analysts projecting a decline of 1.2 million barrels,

According to a report from the American Petroleum Institute released late Wednesday, US crude inventories declined by a less than expected 545,000 barrels in the week ended August 29.

Investors also closely monitored the situation in Ukraine and Libya. According to reports, Ukraine and Russia are in agreement on the steps that are needed to effect a ceasefire.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, dropped USD1.09 or 1.1% to close at USD94.45 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for October delivery scaled a high of USD95.39 a barrel intraday and a low of USD94.16.

The dollar index, which tracks the US unit against six major currencies, traded at 83.80 on Thursday, up from its previous close of 82.85 late Wednesday in North American trade. The dollar scaled a high of 83.87 intraday and a low of 82.84.

The euro trended lower against the dollar at USD1.2941 on Thursday, as compared to its previous close of USD1.3150 late Wednesday in North American trade. The euro scaled a high of USD1.3153 intraday and a low of USD1.2922.

In economic news from the US, private sector employment rose less than expected with 204,000 jobs in August following a downwardly revised increase of 212,000 jobs in July, data released by ADP showed. Economists expected jobs to rise by about 220,000 in the month.

According to a report from the Labor Department, first-time claims for US unemployment benefits rose slightly more than expected to 302,000 in the week ended August 30, from the previous week's unrevised level of 298,000. Economists anticipated claims to tick up to 300,000 in August.

A Commerce Department report on Thursday showed US trade deficit unexpectedly narrowed in July, reflecting moderate increases in the value of both imports and exports. US trade deficit narrowed to USD40.5 billion in July from a revised USD40.8 billion in June. Economists expected the deficit to widen to USD42.3 billion from the USD41.5 billion originally reported for the previous month.

Meanwhile, labor productivity in the US increased by less than previously estimated in the second quarter, rising 2.3%. Earlier estimates had pegged productivity growth at 2.5%. The report also said unit labor costs edged down by a revised 0.1% in the second quarter versus the 0.6% increase originally reported.

A report from the Institute for Supply Management showed activity in the US service sector to have unexpectedly expanded at an accelerated rate to 59.6 in August, from 58.7 in the preceding month.

The European Central Bank which cut its key rates today, cut its growth forecast for this year to 0.9% from 1% predicted in June. The outlook for 2015 was lowered to 1.6% from 1.7%.

The inflation outlook for 2014 was cut to 0.6% from 0.7%, while projections for 2015 and 2016 were retained at 1.1% and 1.4%, respectively.

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Source: Alliance News

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