Crude Oil Plummets To End Near $93 A Barrel

(RTTNews) - U.S. crude oil plunged to end sharply lower on Thursday, on renewed fears of a supply glut following yesterday's weekly official oil report from the Energy Information Administration with crude stockpiles in the U.S. having increased more than expected. Prices also came under pressure after some mixed economic data from the U.S.

On Wednesday, the Federal Reserve reduced its monthly asset purchases to $15 billion, while indicating the program will likely end in October. The Fed maintained its pledge to keep interest rates at near-zero for a "considerable time" after its bond-buying stimulus program ends.

Although policymakers refrained from offering a more specific time-line for the first interest rate hike, there were hints in the Fed statement that tightening may be less gradual once underway. The Fed projects a significant drop in unemployment to below 5 percent by 2017, and said they expect annual inflation to run closer to target levels of around 2 percent.

Nonetheless, the Fed refrained from offering a more specific time-line for raising interest rates, maintaining a cautious tone in its current assessment of the jobs situation, noting there remains significant slack in the labor market.

In economic news from the U.S., first-time claims for U.S. unemployment benefits fell much more than anticipated in the week ended September 13, with claims pulling back near the fourteen-year low set in July.

A Federal Reserve Bank of Philadelphia survey showed continued growth in regional manufacturing activity in September, although the index of activity in the sector dropped from its relatively high reading in August.

Housing starts in the U.S. showed a more than expected drop in August, with new construction of multi-family homes indicating a substantial pullback, a Commerce Department report said.

Crude oil prices have been volatile all week, starting at a multi-month low below $91 before jumping above $95 at one point.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, shed $1.35 or 1.5 percent to close at $93.07 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for October delivery scaled a high of $94.82 a barrel intraday and a low of $92.85.

On Wednesday, crude oil was dragged down by a strong dollar and a more than expected increase in crude stockpiles in the week ended September 12. Nevertheless, oil found some support after the Federal Reserve maintained its pledge to keep its interest rates at near-zero for a "considerable time" after its bond-buying stimulus program ends.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.33 on Thursday, down from its previous close of 84.73 late Wednesday in North American trade. The dollar scaled a high of 84.74 intraday and a low of 83.25.

The euro trended higher against the dollar at $1.2915 on Thursday, as compared to its previous close of $1.2865 late Wednesday in North American trade. The euro scaled a high of $1.2930 intraday and a low of $1.2836.

In economic news from the U.S., data from the Labor Department showed initial jobless claims to have tumbled more than expected to 280,000 in the week ended September 13, falling 36,000 from the previous week's revised level of 316,000. Economists expected jobless claims to edge down to 305,000 from the 315,000 originally reported for the previous week.

A report from the Commerce Department said that U.S. housing starts declined by a much more than expected 14.4 percent to a seasonally adjusted rate of 956,000 in August, from the revised July estimate of 1.1117 million.

Meanwhile, a report released by the Federal Reserve Bank of Philadelphia indicated continued growth in regional manufacturing activity in September, although the bank said the index of activity in the sector declined to 22.5, from a three-year high of 28.0 in August.

From Europe, U.K. retail sales volume including auto fuel in August increased 0.4 percent in August as sale of high powered vacuum cleaners and furniture, offset decline in food store demand. The growth was in line with expectations.

U.K. industrial orders declined more than expected a -4 percent in September from +11 percent in August as export demand dropped to a 21-month low, a survey by the Confederation of British Industry showed Thursday.