U.S. crude oil snapped a five-day winning streak to end lower Wednesday, after the Energy Information Administration weekly oil report showed an unexpected increase in inventories for the week ended September 7. Investors also anxiously awaited cues from the Federal Reserve meeting that got under way earlier today, with expectations high on further quantitative easing measures forthcoming.
A weekly oil report from the Energy Information Administration showed U.S. crude oil inventories to have unexpectedly moved up by 2.00 million barrels, while gasoline stocks shed 1.20 million barrels in the week ended September 7. Analysts expected crude oil inventories to decline by 2.90 million barrels and gasoline stock to ease1.70 million barrels last week.
Earlier today, the International Energy Agency's monthly oil market report maintained its global oil demand forecast for 2013 even as demand grew in the second quarter of 2012.
Light Sweet Crude Oil futures for October delivery shed $0.16 or 0.2 percent to close at $97.01 a barrel on the New York Mercantile Exchange Wednesday.
Crude prices scaled a high of $98.06 a barrel intraday and a low of $96.31.
Yesterday, oil ended higher as investors remained optimistic over the outcome of the Federal Reserve meeting while awaiting a key ruling by Germany's constitutional court on the country's participation in Europe's permanent bailout fund.
Following the German court ruling, the euro traded higher against the dollar at $1.2895 on Wednesday, as compared to $1.2855 late Tuesday in North America. The euro scaled a high of $1.2936 intraday and a low of $1.2816.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.73 on Wednesday, down from 79.89 in North American trade late Tuesday. The dollar scaled a high of 80.02 intraday and a low of 79.52.
The Fed meeting overshadowed a key ruling by Germany's Federal Constitutional Court that allowed the conditional ratification of the European Stability Mechanism fund. The court said Germany must cap its bailout fund share at EUR 190 billion, excess of which should be cleared by the parliament.
In economic news from the U.S., the Labor Department said import prices rose by 0.7 percent in August following a revised 0.7 percent drop in July. Economists expected import prices to move up by 1.5 percent compared to the 0.6 percent decrease originally reported for the previous month. Export prices increased more than expected during the month amid another notable increase in prices for agricultural exports.
U.S. wholesale inventories rebounded more than expected in July following an unexpected drop in June, although July wholesale sales continued to fall following a precipitous drop in the previous month. U.S. wholesale inventories were at a seasonally adjusted level of $485.2 billion, up 0.7 percent from revised June levels. Most economists expected a smaller 0.4 percent increase in wholesale inventories for the month.
Wholesale sales continued to drop in June, dropping to a seasonally adjusted level of $402.4 billion, a 0.1 percent drop from the revised June levels.
In economic news from the eurozone, Germany's inflation, measured by the harmonized index of consumer prices, rose to 2.2 percent in August from 1.9 percent in July, final data from the Federal Statistical Office confirmed. The consumer price index climbed 2.1 percent year-on-year in August, up from July's 1.7 percent. This was slightly above the flash estimate of 2 percent.
Meanwhile, industrial production in the euro area improved in July, recovering from a decline in the previous month. The rate of growth exceeded economists' forecast. Data released by statistical office Eurostat showed industrial production increased 0.6 percent on a monthly basis in July, reversing the 0.6 percent decrease in June. Economists anticipated a 0.1 percent gain.
by RTT Staff Writer
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