Crude Oil For Sept. Plummets To End Below $41 A Barrel

(RTTNews) - U.S. crude oil plunged over 4 percent to end at a six-year low on Wednesday, after official weekly crude oil inventory data from the U.S. Energy Information Administration showed stockpiles to have increased more than expected last week.

Earlier today, a weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories increased 2.6 million barrels in the week ended August 14, while analysts expected stocks to decline 0.8 million barrels.

The report showed total U.S. crude oil inventories at 456.2 million barrels end last week, which is near levels not seen for this time of the year in the last 80 years.

Stocks at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 326,000 barrels last week, compared to a decline of 51,000 barrels in the earlier week.

The report showed total U.S. oil production dropped 47,000 barrels to 9.35 million barrels end last week.

Gasoline stocks dropped 2.7 million barrels last week, while analysts expected a decline of 1.6 million barrels. Inventories of distillate, including heating fuel, rose 0.6 million barrels last week, with analysts anticipating an increase of 1.3 million.

Data from the oil and gas industry trade group, the American Petroleum Institute late Tuesday showed U.S. crude oil stocks to have declined 2.3 million barrels last week.

In a strong sign that the Fed is considering a September rate hike, the minutes from the FOMC said the pace of job gains had been "solid," with a range of labor market indicators suggesting that under-utilization of labor resources had continued to diminish.

The minutes from July meeting showed the Federal Reserve is moving closer to raising interest rates. Most members judged that the conditions for tightening had not yet been achieved, but noted conditions were "approaching that point."

Light Sweet Crude Oil futures for September delivery plunged $1.82 or 4.3 percent, to settle at $40.80 a barrel on the New York Mercantile Exchange Wednesday. The September contract expires on Thursday.

Crude prices for September delivery scaled a high of $42.68 a barrel intraday and a low of $40.46.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, plummeted $1.85 or 4.3 percent, to settle at $41.27 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for October delivery scaled a high of $43.18 a barrel intraday and a low of $40.95.

On Tuesday, crude oil futures for September delivery, jumped $0.75 or 1.8 percent, to close at $42.62 a barrel, ahead of the official weekly crude oil inventory report on Wednesday and some upbeat economic data from the U.S. with housing starts in July rising to an eight-year high.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.54 on Wednesday, down from its previous close of 97.00 in late North American trade on Tuesday. The dollar scaled a high of 97.08 intraday and a low of 96.39.

The euro trended higher against the dollar at $1.1126 on Wednesday, as compared to its previous close of $1.1025 in North American trade late Tuesday. The euro scaled a high of $1.1135 intraday and a low of $1.1020.

On the economic front, consumer prices in the U.S. saw a modest increase, with the consumer price index edging up 0.1 percent in July after climbing by 0.3 percent in June and 0.4 percent in May. Economists expected prices to rise by 0.2 percent.

The euro area current account surplus increased for the first time in five months, the European Central Bank reported Wednesday. The current account surplus rose to a 3-month high of EUR 25.4 billion in June from EUR 19.1 billion in May. This was the first increase since February.

Eurozone construction output decreased in June after rising in the previous month, figures from Eurostat showed Wednesday. Construction output fell a seasonally adjusted 1.9 percent month-over-month in June, in contrast to a 0.2 percent increase in May, which was revised down from the 0.3 percent hike reported earlier.

The U.K. household finance index declined to the lowest level in eight months in August, as households expect a hike in interest rates over the next 12 months, survey data from Markit Economics showed Wednesday.

The seasonally adjusted household finance index, which measures overall perceptions of financial well being and aims to track consumer behavior, dropped to 43.4 in August from 45.1 in July.

A score below 50 suggests pessimism regarding finances among the U.K. households. The latest reading was the lowest so far this year, but still above the average since the survey began around six-and-a-half years ago.

Fitch Ratings upgraded Greece's sovereign ratings by one notch to 'CCC' while indicating that the agreement between Greece and the European institutions last week on the framework for a third bailout has reduced the risk of Greece defaulting.