Oil Futures Settle Sharply Lower As Gasoline Demand Falls
Crude oil futures settled sharply lower on Wednesday despite a steep drop in U.S. crude inventories last week, as worries about a drop in gasoline demand and data showing a surge in oil production by OPEC members weighed on prices.
A firmer dollar too contributed to the decline in crude oil prices today. The dollar index, which had tumbled to more than 2-year low of 91.75 on Tuesday, rallied to 92.87 today before paring some gains.
West Texas Intermediate Crude oil futures for October ended down $1.25 or about 2.9% at $41.51 a barrel.
Brent crude futures drifted down $0.99 or about 2.2% to $44.59 a barrel.
According to Energy Information Administration’s report this morning, U.S. crude inventories plunged 9.3 million barrels in the week ending August 28th, nearly five times the expected drop.
The latest data released by the American Petroleum Institute (API) late Tuesday showed that U.S. crude inventories fell by 6.4 million barrels in the week to Aug. 28, against analysts’ expectations for a draw of 1.9 million barrels.
Gasoline stocks also fell by 5.8 million barrels, exceeding expectations for a draw of 3.0 million barrels.
According to reports, crude oil production from OPEC rose by about 950,000 barrels per day in August, as the cartel continued to relax its production cuts.
The material has been provided by InstaForex Company – www.instaforex.com