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Crude Oil Plunges 4.7% To End Below $45 A Barrel

Crudeoil1 111714 13Mar15

U.S. crude oil plummeted to end over 4 percent lower on Friday, after the International Energy Agency warned global prices may fall further as supplies continue to mount, with U.S. producers still pumping crude despite tightening storage facilities.

For the week, crude oil prices dropped 9.6 percent.

The world's oil watchdog warned the recent stabilization in crude oil prices is nothing but a "facade."

"On the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however," the report said. "Behind the facade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly."

U.S. oil production was up 115,000 barrels a day in February, the IEA said. Companies were targeting high-yield shale field even as big rigs were mothballed.

Meanwhile, Baker Hughes on Friday reported that the number of U.S. rigs actively drilling for oil and natural gas as of March 13 dropped by 67 rigs from last week to 1,125. However, the the lower rig count did not seem to have an impact on crude oil after the IEA report with weekly inventories also rising more than expected.

Crude oil found little support elsewhere with the dollar jumping 1.3 percent against the euro, reaching its highest level versus the European currency in twelve years. The greenback topped the historic 100 barrier against a basket of six major currencies, with the index touching 100.37 before falling back slightly.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, plunged $2.21 or 4.7 percent to settle at $44.84 a barrel on the New York Mercantile Exchange Friday.

Crude prices for April delivery scaled a high of $47.28 a barrel intraday and a low of $44.75

On Thursday, crude oil shed $1.12 or 2.3 percent to settle at $47.05 a barrel, on supply glut concerns amid signs that U.S. inventories will continue to rise after the official oil report from the Energy Information Administration showed stockpiles to have risen more than expected last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 100.31 on Friday, up from its previous close of 99.27 on Thursday in late North American trade. The dollar scaled a high of 100.37 intraday and a low of 99.20. The dollar scaled its highest in the last one year intraday.

The euro trended lower against the dollar at $1.0471 on Friday, as compared to its previous close of $1.0636 in North American trade late Thursday. The euro scaled a high of $1.0637 intraday and a low of $1.0463, the lowest in the last one year.

In economic news, producer prices in the U.S. unexpectedly decreased in February, a report from the Labor Department showed Friday, although analysts said the drop was primarily due to a quirk in the calculation of margins. The producer price index for final demand fell by 0.5 percent in February after slumping by 0.8 percent in January. Economists expected producer prices to rise by about 0.3 percent.

Consumer sentiment in the U.S. unexpectedly deteriorated in March, preliminary results of a survey by the University of Michigan showed. Consumer sentiment index tumbled to 91.2 in March from the final February reading of 95.4. Economists expected the consumer sentiment index to inch up to a reading of 96.0.

From the eurozone, Germany's wholesale prices declined at a slower pace in February, data from Destatis showed Friday. Wholesale prices decreased 2.1 percent year-on-year in February, slower than the 2.6 percent decline seen in January. The wholesale price index has been declining since July 2013.

U.K. construction output declined unexpectedly in January, marking its first annual fall in nearly two years, dampened by weaker housing, data from the Office for National Statistics revealed Friday. Construction output dropped 3.1 percent year-on-year, in contrast to a 5.3 percent growth in December. Economists had forecast a gain of 2.1 percent. This was the first year-on-year decrease since May 2013 when it fell by 2.8 percent, the ONS said.

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