Crude Oil Ends Sharply Higher On Supply Data

(RTTNews) - U.S. crude oil rebounded to end sharply higher on Wednesday, after an official weekly oil report from the Energy Information Administration showed U.S. stockpiles to have risen less than expected last week.

Oil was also supported by news reports of a pipeline blast in Saudi Arabia which was purported to have been brought under control quickly. The Wall Street Journal said the oil pipeline belonging to Saudi Aramco, caught fire while undergoing repairs. However, the Journal quoting company sources, said the fire was limited and brought under control subsequently.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen by 0.5 million barrels in the week ended October 31, which was well below analysts expectation of an increase of 1.9 million barrels. The EIA report showed U.S. crude oil inventories at 380.2 million barrels, end last week.

Gasoline stocks dropped by 1.4 million barrels last week, while analysts anticipated a decrease of 1.0 million barrels. Inventories of distillate, including heating fuel, dropped 0.7 million barrels last week. Analysts anticipated a decline of 1.8 million barrels.

Data released by the American Petroleum Institute late Tuesday showed U.S. crude inventories to have declined by 639,000 barrels last week.

In falling to a 3-year low this week, oil has dropped nearly 50 percent from its all-time highs on signs of a global supply glut.

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, jumped $1.49 or 1.9 percent to close at $78.68 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for December delivery scaled a high of $79.35 a barrel intraday and a low of $76.46.

On Tuesday, crude oil futures ended down $1.59 or 2.0 percent at $77.19 a barrel, extending losses to a fourth straight session. Crude oil dropped to a low of $75.84 intraday, the lowest level in three years.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.44 on Wednesday, up from its previous close of 87.00 late Tuesday in North American trade. The dollar scaled a high of 87.61 intraday and a low of 86.94.

The euro trended higher against the dollar at $1.2483 on Wednesday, as compared to its previous close of $1.2546 late Tuesday in North American trade. The euro scaled a high of $1.2567 intraday and a low of $1.2458.

In economic news, data released by payroll processor ADP showed U.S. private sector to have added more than anticipated 230,000 jobs in October, following an upwardly revised increase of 225,000 jobs in September. Economists expected an addition of about 220,000 jobs compared to the addition of 213,000 jobs originally reported for the previous month.

According to a report from the Institute for Supply Management, activity in the U.S. service sector grew at a slower rate in the month of October. The ISM's non-manufacturing index dropped to 57.1 in October from 58.6 in the preceding month.

In economic news from Asia, a report from Markit Economics showed China's services sector growth to have slowed in October, with the HSBC services business activity index falling to 52.9 in the month, from 53.5 in September.

Japan's service sector contracted for the fifth time since the sales tax was raised in April, a survey showed Wednesday. The headline services Purchasing Managers' Index dropped to 48.7 in October from 52.5 in September, marking the fastest fall since April. The decline in activity was partly the result of poor weather.

Eurozone retail sales declined more than expected in September on a notable decrease in non-food product sales, data revealed Wednesday. Retail sales fell 1.3 percent in September from last month reversing a 0.9 percent rise in August, Eurostat said. Sales were expected to fall moderately by 0.8 percent.

U.K. service sector growth slowed more than expected to a seventeen-month low in October, a survey report showed Wednesday. The Markit/CIPS services purchasing managers' index dropped to 56.2 in October from 58.7 in September, less than the 58.5 score expected by economists.