Crude Oil Surges To End Higher On Supply Data

(RTTNews) - U.S. crude oil soared to end higher for a second straight session Wednesday, after an official weekly crude oil inventory data showed stockpiles in the U.S. to have declined more than expected last week. Investors also indulged in some bargain hunting notwithstanding a strengthening dollar.

Earlier today, a report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped 4.3 million barrels in the week ended September 19, while analysts anticipated an increase of 0.4 million barrels. The EIA report showed U.S. crude oil inventories at 358 million barrels, end last week.

Gasoline stocks dropped 0.4 million barrels last week, with analysts anticipating a rise of 0.1 million barrels. Inventories of distillate, including heating fuel, rose 0.8 million barrels last week, while analysts anticipated a gain of 0.6 million barrels.

Meanwhile, a report from the American Petroleum Institute released late Tuesday, showed crude oil stockpiles to have declined 6.5 million barrels last week.

Earlier in the day, oil had briefly turned lower on the back of reports that supplies from Libya have started flowing into the market.

Geopolitical worries remained with the U.S. President Barack Obama calling for more nations to join the fight against Islamic militants in Syria and Iraq.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, gained $1.24 or 1.35 percent to close at $92.80 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for November delivery scaled a high of $92.35 a barrel intraday and a low of $91.12.

On Tuesday, crude oil futures ended higher snapping a four-day losing streak. Geopolitical concerns on the back of U.S. airstrikes on Islamic militants in Syria and a fairly encouraging report on the Chinese manufacturing sector lifted oil prices.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.04 on Wednesday, up from its previous close of 84.70 late Tuesday in North American trade. The dollar scaled a high of 85.09 intraday and a low of 84.60.

The euro trended lower against the dollar at $1.2781 on Wednesday, as compared to its previous close of $1.2848 late Tuesday in North American trade. The euro scaled a high of $1.2863 intraday and a low of $1.2774.

In economic news, a Commerce Department report showed new home sales in the U.S. increase substantially in August, with the annual rate of sales at its highest level in over six years. New home sales surged up 18.0 percent to a seasonally adjusted annual rate of 504,000 in August from the upwardly revised July rate of 427,000. Economists expected new home sales to climb to an annual rate of 430,000 from the 412,000 originally reported for the previous month.

From the eurozone, German business confidence weakened for the fifth straight month in September adding to signs that the largest euro area economy is set to see a slow recovery, a survey by the Ifo institute showed Wednesday. The Ifo business climate index dropped more-than-expected to 104.7 in September from 106.3 in August. This was the lowest score since April 2013, when the reading was 104.2. Economists had forecast the indicator to drop to 106.3 in August.

Meanwhile, the European Central Bank President Mario Draghi said Wednesday that euro area interest rates are likely to remain low for a long period of time and the bank is ready to use all possible tools to bring inflation back to the 2 percent target.

"Interest rates will stay at the present level for an extended period of time because they can't go much lower than that," he said.