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Crude Oil Ends Higher As U.S. Stockpiles Decline

U.S. crude oil futures settled higher Wednesday, after an Energy Information Administration report showed US crude stockpiles declined unexpectedly last week, a sign demand may be improving.

Latest data from the Energy Information Administration revealed U.S crude oil inventories unexpectedly dipped by 1.20 million barrels and gasoline stocks eased a similar 1.20 million barrels in the week ended March 16. Analysts expected crude inventories to gain 2.10 million barrels and gasoline stocks to dip 1.80 million barrels last week.

Yesterday, crude prices dropped sharply as supply concerns eased after Saudi Arabia assured enough supplies to stabilize the market while China hiked retail oil prices, fueling worries of an economic slowdown. Demand concerns were further highlighted after miner BHP said China's iron-ore demand had slowed down.

Light Sweet Crude Oil futures for May delivery, the new front month contract, gained $1.66 or 1.1 percent to close at $107.27 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices scaled a high of $107.64 a barrel intraday and a low of $106.06.

Late Tuesday, the American Petroleum Institute said crude oil inventories dropped 1.4 million barrels and gasoline stocks dipped a similar 1.4 million barrels for the week ended March 16.

The euro was trading lower against the dollar at $1.3199 on Wednesday, as compared to $1.3224 late Tuesday. The euro had scaled a high of $1.3284 intraday with a low of $1.3180.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.678 on Wednesday, up from 79.616 late Tuesday. The dollar scaled a high of 79.83 intraday, with a low of 79.32.

In economic news from the US, the National Association of Realtors said existing home sales slipped 0.9 percent to a seasonally adjusted annual rate of 4.59 million in February from an upwardly revised 4.63 million in January. Economists expected existing home sales to edge up to 4.61 million from the 4.57 million that had been reported for the previous month. The modest drop in existing home sales in February came after sales surged up by an upwardly revised 5.7 percent in January.

Elsewhere, the Bank of England retained its quantitative easing unchanged at GBP 325 billion through a split vote as two members preferred a GBP 25 billion increase in the program, the minutes of the meeting showed. All members voted to retain a record low 0.5 percent interest rate. The meeting was held on March 7 and 8.

by RTTNews Staff Writer

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