Crude Oil Plunges To End Near $54 On Renewed Oversupply, Demand Growth Concerns

(RTTNews) - U.S. crude oil plunged to end over 4 percent lower on Thursday, on renewed worries over the oversupply situation amid demand growth concerns, even as U.S. stockpiles declined albeit less than expected last week.

Earlier today, crude prices moved higher, lifted by short-covering and an upbeat jobs data after plunging to 5-1/2 year lows, and as well supported by a modest decline in U.S. crude inventories last week.

Investors also reacted to the U.S. Federal Reserve's monetary policy statement yesterday. The Fed said it would be patient with regard to interest rate hikes, indicating that it will take its time before withdrawing any further support for the recovering economy.

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, plunged $2.36 or 4.2 percent to close at $54.11 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for January delivery scaled a high of $58.73 a barrel intraday and a low of $54.05.

On Wednesday, crude oil futures ended at $56.47 a barrel, up $0.54 or 1.0 percent, after the official weekly oil report from the U.S. Energy Information Administration showed crude oil stockpiles in the U.S. to have dropped, albeit less than expected. .

The dollar index, which tracks the U.S. unit against six major currencies, traded at 89.24 on Thursday, up from its previous close of 89.08 late Wednesday in North American trade. The dollar scaled a high of 89.40 intraday and a low of 88.92.

The euro trended lower against the dollar at $1.2284 on Thursday, as compared to its previous close of $1.2343 late Wednesday in North American trade. The euro scaled a high of $1.2353 intraday and a low of $1.2268.

In economic news from the U.S., a Labor Department report showed initial jobless claims to have declined by 6,000 to 289,000 in the week ended December 13. Economists expected claims at 295,000, up from previous week's unrevised figure of 294,000.

A report from the Federal Reserve Bank of Philadelphia showed continued increase in regional manufacturing activity in December, although the pace of growth in the sector slowed substantially. The Philly Fed said its diffusion index for current activity tumbled to 24.5 in December from 40.8 in November. Economists expected the index to drop to a reading of 25.0.

Meanwhile, the Conference Board 's leading economic index rose in line with expectations, moving up by 0.6 percent in November following a downwardly revised 0.6 percent increase in October.

Meanwhile, German business confidence improved to a score of 105.5, rising for the second straight month to a 4-month high as expectations of firms brightened while their current assessment remained unchanged in December, a survey by Ifo institute showed.

U.K. retail sales growth accelerated unexpectedly in November as consumers boosted their spending on "Black Friday" a day after Thanksgiving, marking the start of the holiday season. Retail sales volume including automotive fuel increased 1.6 percent from October, the Office for National Statistics said Thursday. This was the biggest monthly rise since last December. The monthly growth rate was expected to slow to 0.4 percent from 1 percent in October.

From Europe, the Swiss National Bank decided in an unscheduled meeting to cut interest rate to -0.25 percent.