Crude Oil Ends Lower As U.S. Stockpiles Jump

(RTTNews) - U.S. crude oil ended lower on Wednesday, after the weekly oil inventory report from the Energy Information Administration showed stockpiles to have increased much more than expected last week, amid continued tensions in the Middle East and the Greek financial crisis still unresolved.

Nevertheless, oil futures pared some of the losses as gasoline stockpiles declined more than expected with domestic production dwindling further.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen 5.3 million barrels in the week ended April 17, while analysts expected an increase of 2.6 million barrels. The report showed U.S. crude oil inventories at 489.0 million barrels end last week. Stockpiles are still at its highest in about 80 years and have been climbing for the 15th straight week since the week ended January 9.

Gasoline stocks dropped by 2.1 million barrels last week, with analysts anticipating a decline of 1.4 million barrels. Inventories of distillate, including heating fuel, rose 0.4 million barrels, with analysts anticipating an increase of 0.5 million barrels.

Domestic crude production declined by about 18,000 barrels, although output was up a near 13.5 percent year-on-year.

Data from the oil and gas industry trade group American Petroleum Institute late Tuesday showed U.S. crude oil stocks to have risen by 5.5 million barrels last week.

The tensions in Yemen continued on the backdrop of a tussle between regional powers, Saudi Arabia and Iran. Nevertheless, a coalition led by Saudi Arabia concluded its air strikes against Houthi rebels, which the Saudi's say has rendered the rebels ineffective. However, this could be the start of a new phase in fight between rebels and government forces for supremacy.

Meanwhile, uncertainties over the Greek financial crisis continued, with little or no progress toward an agreement on the required reforms for the urgent financial aid from the European Union. However, European Central Bank Executive Board Member Benoit Coeure ruled out a Greek exit from the eurozone.

In an interview to the Greek daily Kathimerini, text of which was published on the ECB website, Coeure said, "It is out of the question to speculate about such a scenario. The euro area needs Greece just as Greece needs the euro."

Coeure said the current situation is clearly not sustainable for Greece and called for quick and decisive action by the Greek authorities to turn things around. The uncertainty regarding the country's bailout program and further funding has been dragging down economic activity further.

Light Sweet Crude Oil futures for June delivery, the most actively traded contract, dropped $0.45 or 0.8 percent, to settle at $56.16 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for June delivery scaled a high of $57.19 a barrel intraday and a low of $55.73.

On Tuesday, crude oil dropped $1.27 or 2.3 percent, to settle at $56.61, ahead of the weekly oil inventory report from the American Petroleum Institute and the U.S. Energy Information Administration, even as tensions in the Middle East and Greek financial woes continued to be in focus.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.96 on Wednesday, down from its previous close of 97.99 on Tuesday in late North American trade. The dollar scaled a high of 98.12 intraday and a low of 97.43.

The euro trended higher against the dollar at $1.0737 on Wednesday, as compared to its previous close of $1.0736 in North American trade late Tuesday. The euro scaled a high of $1.0802 intraday and a low of $1.0710.

On the economic front, existing home sales in the U.S. increased much more than expected in March, a report released by the National Association of Realtors on Wednesday, with existing home sales jumping to their highest rate in 18 months. NAR said existing home sales surged 6.1 percent to an annual rate of 5.19 million in March from a revised 4.89 million in February. Economists expected existing home sales to climb to a rate of 5.05 million from the 4.88 million originally reported for the previous month.

Eurozone consumer confidence deteriorated for the first time in five months in April, defying expectations for further strengthening, as the uncertainty on Greece lingers, preliminary data from the European Commission showed Wednesday. The flash consumer confidence index dropped to -4.6 from -3.7 in March, which was the highest score since July 2007. Economists had predicted a higher score of -2.5 for April.

The leading index for Germany, which measures the future economic activity, increased at a stable pace in February, figures from the Conference Board showed Tuesday. The leading economic index climbed 0.4 percent in February, the same rate of rise as in the previous month. It was the fourth consecutive monthly increase.

UK households' finance outlook remained positive for the seventh straight month in April and their financial woes eased to the weakest seen for over six years, underpinned by lower inflation perceptions and improved market conditions, results of a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday.

The seasonally adjusted Markit Household Finance Index, which measures overall perceptions of financial well being and aims to track consumer behavior, rose to 45.8 in April from 45.5 in the previous month.