Crude Oil Plummets To End Below $50 As Stockpiles Rise

(RTTNews) - U.S. crude oil plunged to end at a 3-1/2-month low Wednesday, on renewed concerns over a supply glut after official data from the Energy Information Administration showed crude stockpiles in the U.S. 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 2.5 million barrels in the week ended July 17, while analysts expected stocks to decline 1.9 million barrels. The report showed total U.S. crude oil inventories at 463.9 million barrels end last week.

Stocks at Cushing, Oklahoma, the key delivery point for Nymex crude, increased 0.81 million barrels last week, while it was estimated to rise by 0.44 million barrels.

Gasoline stocks dropped 1.7 million barrels last week, while analysts expected an increase of 0.9 million barrels. Inventories of distillate, including heating fuel, rose 0.2 million barrels last week, even as analysts anticipated an increase of 1.8 million.

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

Crude oil prices have fallen sharply of late due to fewer geopolitical tensions, oversupplies and a stronger dollar.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, plummeted $1.67 or 3.3 percent, to settle at $49.19 a barrel on the New York Mercantile Exchange Wednesday. This is the lowest settlement for an actively traded contract since April 2.

Crude prices for September delivery scaled a high of $50.71 a barrel intraday and a low of $49.06.

On Tuesday, crude oil prices for September delivery gained $0.42 or 0.8 percent, to settle at $50.86 a barrel, with the dollar trending lower against some major currencies and investors awaited the official weekly oil report from the Energy Information Administration.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.59 on Wednesday, up from its previous close of 97.32 in late North American trade on Tuesday. The dollar scaled a high of 97.79 intraday and a low of 97.11.

The euro trended lower against the dollar at $1.0907 on Wednesday, as compared to its previous close of $1.0936 in North American trade late Tuesday. The euro scaled a high of $1.0967 intraday and a low of $1.0871.

In economic news, the National Association of Realtors on Wednesday said U.S. existing home sales climbed 3.2 percent to an annual rate of 5.49 million in June from a downwardly revised 5.32 million in May. Economists expected existing home sales to edge up to an annual rate of 5.40 million in June from the 5.35 million originally reported for the previous month.

Elsewhere, a leading economic index for the Chinese economy was up 1.0 percent in June, the Conference Board said on Wednesday. That follows the 1.1 percent increase in May and the 1.5 percent spike in April.

From Europe, UK households' finance outlook for July dropped to its lowest level in a year, a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday. The household finance index rose to 45.3 in July from 43.8 in the previous month. A score below 50 suggests pessimism regarding finances among the U.K. households. However, the latest score was slightly above the average recorded in the second quarter this year.

The Bank of England unanimously decided to keep its monetary policy unchanged at the meeting held early this month, but more rate-setters moved closer to vote for a rate hike. The Monetary Policy Committee voted 9-0 to retain its key rate at a record low 0.50 percent and asset purchase program at GBP 375 billion.

French manufacturing confidence improved more-than-expected in July, after falling in the previous month, figures from the statistical office Insee showed Wednesday. The manufacturing confidence index rose to 102.0 in July from 100.0 in June. Economists expected the index to rise to 101.0. In May, the reading was 103.0.