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Crude Dips To 5-week Low

Crude Dips To 5-week Low

The price of crude oil was extending losses Thursday morning amid doubts over the Federal Reserve's monetary stimulus program and as traders await cues from the official inventories data, due out later today.

Light Sweet Crude Oil (WTI) futures for April delivery, the most actively traded contract, were down $1.20 to $94.02 a barrel. Yesterday, oil shed 2 percent amid rumors of an unwinding of large positions by a commodity hedge fund.

Wednesday after the market hours, the API said US crude oil inventories rose 3 million barrels, while gasoline stocks shed 120,000 barrels in the weekended February 15.

This morning, the U.S. dollar advanced to a 7-week high versus the euro and surged to a 30-month high against sterling. The buck was hovering around its two-and half year high versus the yen and ticking higher against the Swiss franc.

In economic news from the euro zone, Germany's private sector business activity slowed in February, preliminary results of a survey by Markit Economics revealed. The flash composite output index, that measures performance of both manufacturing and services sectors, fell to 52.7 in February from 54.4 in January.

A flash estimate from the Markit Economics showed that the decline in euro zone private sector deepened in February, contrasting with the easing trend seen in the previous three months. The flash composite output index fell unexpectedly to 47.3 in February from 48.6 in January. The reading was forecast to rise to 49. A below-50 reading suggests that the sector continues to contract.

Traders will look to the inflation report from the US Labor Department, due out at 8.30 a.m ET. Economists expect the headline index to edge up by 0.1 percent and the core consumer price index to improve by 0.2 percent.

Separately, the Labor Department will release its jobless claims report for the week ended February 16. Economists expect claims to increase to 359,000 from 341,000 in the previous week.

The National Association of Realtors is due to release its existing home sales report for January at 10 am ET. The consensus estimates call for a slight decline in existing home sale sales to a seasonally adjusted annual rate of 4.90 million units from 4.94 million units in the previous month.

Today during trading hours, the EIA will release its US crude oil inventories data for the weekended February 15. Analysts expect crude oil inventories to add 2 million barrels, while gasoline stocks are seen shedding 0.90 million barrels last week.

by RTT Staff Writer

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