U.S. crude oil futures snapped a three-day gain to close sharply lower Wednesday, as an Energy Information Administration report showed U.S. crude stockpiles increased more than double of what analysts expected.
Oil prices were also impacted by a strong dollar and on news reports of the U.S., France and U.K. collaborating to release oil from their strategic reserves.
Light Sweet Crude Oil futures for May delivery, dropped $1.92 or 1.8 percent to close at $105.41 a barrel on the New York Mercantile Exchange Wednesday.
Crude prices scaled a high of $106.94 a barrel intraday and a low of $104.67.
Latest data from the EIA revealed U.S. crude oil inventories jumped 7.10 million barrels, while gasoline stocks were down by 3.50 million barrels in the week ended March 23. Analysts expected crude oil inventories to jump 2.55 million barrels, with gasoline stocks to ease 1.55 million barrels last week. Reports of a possible release of U.S. strategic oil reserves also weighed on crude prices.
The Association of Petroleum Institute on Tuesday estimated crude oil inventories to have jumped 3.60 million barrels and gasoline stocks up 1.3 million barrels in the week ended March 23.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.253 on Wednesday, up from 79.087 in North American trade late Tuesday. The dollar scaled a high of 79.34 intraday, with a low of 78.88.
The euro was trading lower against the dollar at $1.3298 on Wednesday, as compared to $1.3331 late Tuesday. The euro had scaled a high of $1.3372 intraday with a low of $1.3278.
In economic news, the U.S. Commerce Department said durable goods orders rose 2.2 percent in February following a revised 3.6 percent decrease in January. Economists had expected orders to increase by 2.9 percent compared to the 3.7 percent drop that had been reported for the previous month.
Excluding a 3.9 percent increase in orders for transportation equipment, durable goods orders increased by a modest 1.6 percent in February compared to a 3.0 percent decrease in January. The increase in ex-transportation orders came in slightly above economist estimates for a 1.5 percent increase.
From the euro zone, economic contraction in the U.K. during the fourth quarter was worse than estimated initially, revised data released by the Office for National Statistics showed. Gross domestic product fell 0.3 percent from the third quarter, compared to the previously estimated 0.2 percent decline.
by RTT Staff Writer
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