Crude Oil Ends Higher On Supply Data

(RTTNews) - U.S. crude oil ended higher for a second straight session on Wednesday, having touched an intraday high of near $59 a barrel after an official weekly oil report from the Energy Information Administration showed crude oil stockpiles in the U.S. to have dropped, albeit less than expected.

Meanwhile, the U.S. Federal Reserve in its monetary policy statement said it would be patient with regard to interest rate hikes, while expressing little concern over the potential impact of plunging oil prices on inflation.

In essence, its was a Fed reassurance to markets that it will take its time before withdrawing any further support for the recovering economy.

Crude oil prices have been under pressure after weak projections for global demand during a supply glut. Crude has plunged to its lowest since 2009 losing more than 40 percent from its summer-time highs.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped by 0.85 million barrels in the week ended December 12, while analysts expected a decline of 2.36 million barrels. The report showed U.S. crude oil inventories at 379.9 million barrels, end last week.

Gasoline stocks jumped by 5.25 million barrels last week, while analysts anticipated a gain of 1.78 million barrels. Inventories of distillate, including heating fuel, fell by 0.21 million barrels last week.

Industry data from the American Petroleum Institute said Tuesday that crude inventories in the U.S. rose 1.9 million barrels last week.

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, gained $0.54 or 1.0 percent to close at $56.47 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for January delivery scaled a high of $58.98 a barrel intraday and a low of $54.21.

On Tuesday, crude oil futures ended at $55.93 a barrel, down $0.02, after fluctuating for much of the day as the dollar weakened on some soft data from the U.S. and China, and ahead of the weekly oil report from the Energy Information Administration.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 89.14 on Wednesday, down from its previous close of 87.97 late Tuesday in North American trade. The dollar scaled a high of 89.14 intraday and a low of 87.90.

The euro trended lower against the dollar at $1.2366 on Wednesday, as compared to its previous close of $1.2512 late Tuesday in North American trade. The euro scaled a high of $1.2518 intraday and a low of $1.2388.

In economic news from the U.S., a Labor Department report showed consumer price index to have dropped by 0.3 percent in November, after coming in unchanged in October. Economists expected the index to edge down by 0.1 percent.

The U.S. Federal Reserve, at the end of its two-day Federal Open Market Committee policy meet on Wednesday said it will be "patient" in determining when to raise interest rates, a subtle change in language from its previous vow to keep rates near zero for a "considerable time."

In economic news from eurozone, inflation came in line with flash estimate in November at a five-year low, final data from Eurostat showed. Annual inflation came in at 0.3 percent in November, down from 0.4 percent in October. A year ago, the rate was at 0.9 percent. The November inflation matched flash estimate released on November 28.

From Europe, the unemployment rate in U.K. eased to a 6-year low in the three months to October and earnings growth exceeded inflation, boosting scope for strong private spending in coming months. The jobless rate dropped to 6 percent during August to October from 6.2 percent seen in the May to July period, the Office for National Statistics reported Wednesday. Economists had forecast a rate of 5.9 percent. This was the lowest since late 2008.

Meanwhile, Bank of England policymakers decided to leave its key interest rate at a historic low of 0.50 percent in a split vote for the fifth straight time at the meeting held on December 3 and 4. The central bank also unanimously decided to maintain its asset purchase program at GBP 375 billion.

The Asian Development Bank downgraded its growth outlook for Developing Asia as momentum slowed in the second half of 2014, the Manila-based Asian Development Bank said Wednesday. The bank said the region will grow 6.1 percent in 2014 instead of 6.2 percent estimated in September.

The ADB revised China's growth forecast down to 7.4 percent in 2014 from 7.5 percent, and to 7.2 percent from 7.4 percent for 2015. For India, the bank maintained a 5.5 percent growth outlook for FY2014, while indicating the government should extend efforts to reach the 6.3 percent growth estimate in FY2015.