Crude Oil Ends Lower Even As Stockpiles Decline

(RTTNews) - U.S. crude oil pared gains to end lower on Wednesday, as supply glut fears continued to persist despite official data from the Energy Information Administration showed a decline in U.S. crude stockpiles end last week.

Crude oil prices rose toward multi-month highs Wednesday morning, despite a warning from International Energy Agency that the global price war between OPEC and non-OPEC nations will continue.

Earlier today, a weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories dropped 2.2 million barrels in the week ended May 8, while analysts expected a decline of 0.25 million barrels. The report showed U.S. crude oil inventories at 484.8 million barrels end last week.

Gasoline stocks dropped 1.1 million barrels last week, with analysts anticipating a rise of 0.17 million barrels. Inventories of distillate, including heating fuel, dipped 2.5 million barrels, with analysts expecting an increase of 0.42 million.

Data from the oil and gas industry trade group American Petroleum Institute late Tuesday showed U.S. crude oil stocks to have dropped 2.0 million barrels last week.

In its closely watched monthly oil market report, the IEA said U.S. shale producers were indeed cutting back production, but other non-OPEC producers picked up the slack, especially China.

"It would thus be premature to suggest that OPEC has won the battle for market share. The battle, rather, has just started," the IEA said.

The agency raised its forecast of 2015 non-OPEC production growth by 200,000 barrels a day to 830,000 barrels a day. Still, hopes for increased demand and a weaker U.S. dollar have pushed crude oil toward 2015 highs this week.

Meanwhile, OPEC production surged over 31 million barrels a day in April.

Light Sweet Crude Oil futures for June delivery, the most actively traded contract, dipped $0.25 or 0.4 percent, to settle at $60.50 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for June delivery scaled a high of $61.85 a barrel intraday and a low of $60.22.

On Tuesday, crude oil jumped $1.50 or 2.5 percent, to settle at $60.75 a barrel as the dollar trended lower against some major currencies while the U.S. Energy Information Administration raised its price forecast for the year.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 93.60 on Wednesday, down from its previous close of 94.56 on Tuesday in late North American trade. The dollar scaled a high of 94.59 intraday and a low of 93.46.

The euro trended higher against the dollar at $1.1363 on Wednesday, as compared to its previous close of $1.1214 in North American trade late Tuesday. The euro scaled a high of $1.1384 intraday and a low of $1.1205.

On the economic front, a Labor Department report on Wednesday showed an unexpected drop in U.S. import prices in April, with falling non-fuel prices more than offsetting higher fuel prices. Import prices fell by 0.3 percent in April following a revised 0.2 percent decrease in March. Economists had expected import prices to climb by 0.4 percent.

U.S. export prices dropped by 0.7 percent in April after inching up by 0.1 percent in the previous month. Export prices were expected to show an uptick of 0.1 percent.

A Commerce Department report showed a modest increase in U.S. business inventories in March, with the uptick short of economist estimates. Business inventories inched up by 0.1 percent in March after edging up by a downwardly revised 0.2 percent in February. Economists expected inventories to rise by 0.2 percent compared to the 0.3 percent increase originally reported for the previous month.

China's industrial production grew at a faster pace in April, while retail sales growth eased for the third straight month, data from the National Bureau of Statistics showed Wednesday.

Industrial output expanded 5.9 percent year-on-year in April, faster than March's 5.6 percent increase. Nonetheless, it was slightly weaker than a 6 percent rise forecast by economists.

Annual growth in retail sales slowed to 10 percent in April from 10.2 percent in March. The annual growth rate slowed for the third straight month and came in below the expected increase of 10.4 percent.

Eurozone economic growth improved as expected in the first quarter as growth in France and Spain accelerated and Italy expanded, offsetting the weak performance of Germany.

Gross domestic product of the 19-nation bloc expanded 0.4 percent sequentially in the first quarter, slightly faster than the 0.3 percent growth seen in the fourth quarter of 2014, flash estimates published by Eurostat showed Wednesday. The growth rate matched economists' expectations.

The German economy grew at a slower pace in the first quarter of the year, data released by Destatis showed Wednesday. Gross domestic product rose 0.3 percent sequentially, slower than the 0.7 percent expansion seen a quarter ago. It was also weaker than the 0.5 percent growth forecast by economists.

The French economic growth accelerated at a faster-than-expected pace in the first quarter, the statistical office Insee showed Wednesday. Gross domestic product grew 0.6 percent in the three months ended March, exceeding economists' expectations for a 0.4 percent climb, after showing no variations in the previous quarter.

French consumer prices increased in April after falling for three straight months, the statistical office Insee reported Wednesday. Consumer prices rose 0.1 percent from last year, reversing March's 0.1 percent fall. The annual rate came in line with expectations.

Germany's consumer price inflation accelerated for the third straight month in April at a faster than initially estimated pace, final data from Destatis showed Wednesday. The consumer price index climbed 0.5 percent year-over-year in April, revised from a 0.4 percent increase estimated earlier. In March prices had risen 0.3 percent.

U.K. unemployment declined to the lowest since 2008 during the first quarter of 2015 and earnings increased more than expected, data from the Office for National Statistics revealed Wednesday. The ILO jobless rate came in at 5.5 percent during January to March period compared to 5.7 percent in October to December quarter. The rate came in line with expectations. This was the lowest since 2008.