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Crude Oil Slumps Below $50 On Surprise Gas Glut

Crude oil futures dropped below $50 a barrel Wednesday as government data confirmed a large build in gasoline stockpiles.

The U.S. EIA reported this morning that U.S. crude inventories dropped by 6 million barrels last week. However, total motor gasoline inventories increased 1.6 million barrels last week, and are in the upper half of the average range.

Yesterday, an industry report from the American Petroleum Institute said crude oil stockpiles dropped 4.08 million barrels, but that gasoline inventories surged up 4.19 million barrels.

The gasoline glut means reduced demand for crude oil as refiners scale back.

WTI light sweet inventories were down 44 cents, or 0.9 percent, $49.98 a barrel.

In economic news, ADP said U.S. private sector employment rose by 135,000 jobs in September after surging up by a revised 228,000 jobs in August.

Activity in the U.S. service sector grew at a notably faster rate in the month of September, the Institute for Supply Management revealed in a report on Wednesday.

The ISM said its non-manufacturing index jumped to 59.8 in September from 55.3 in August, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 55.5.

by RTT Staff Writer

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