Crude Oil Plummets Near 2% As U.S. Inventories Surge

(RTTNews) - U.S. crude oil plummeted to end sharply lower on Wednesday, after a weekly oil report from the U.S. Energy Information Administration showed crude oil inventories to have surged nearly three times more than expected last week, with renewed concerns over excess supply globally.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have risen by 7.1 million barrels in the week ended October 17, while analysts anticipated an increase of 2.7 million barrels. The EIA report showed U.S. crude oil inventories at 377.7 million barrels, end last week.

Gasoline stocks dropped by 1.3 million barrels last week, with analysts anticipating a decrease of 1.0 million barrels. Inventories of distillate, including heating fuel, added 1.0 million barrels last week. Analysts anticipated a decline of 1.3 million barrels.

Data from the American Petroleum Institute late Tuesday showed U.S. crude inventories to have risen by 1.2 million barrels last week.

Oil prices had recently tumbled to the lowest level in nearly four year, slipping briefly below $80 amid concerns about excess supply globally, with the OPEC countries reportedly unwilling to cut crude production.

According to reports, China's oil imports from Saudi Arabia fell 2.7 percent in September despite the latter cutting prices to attract Asian customers.

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, plunged $1.97 or 2.4 percent to close at $80.52 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for December delivery scaled a high of $83.15 a barrel intraday and a low of $80.46.

On Tuesday, crude oil futures ended up $0.58 or 0.7 percent at $82.49 a barrel, despite lingering concerns over the health of the global economy.

Oil was supported by reports showing China's gross domestic product to have risen more than expected in the third quarter and industrial production to have increased by 8 percent in September.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.74 on Wednesday, up from its previous close of 85.40 late Tuesday in North American trade. The dollar scaled a high of 85.75 intraday and a low of 85.23.

The euro trended lower against the dollar at $1.2650 on Wednesday, as compared to its previous close of $1.2716 late Tuesday in North American trade. The euro scaled a high of $1.2740 intraday and a low of $1.2642.

In economic news, consumer prices in the U.S. unexpectedly increased modestly in September, with higher prices for food and shelter offsetting a continued decline in energy prices, a Labor Department report said Wednesday. The Labor Department said its consumer price index edged up 0.1 percent in September following a 0.2 percent drop in August. Economists expected prices to come in unchanged.

In Europe, Bank of England policymakers decided to leave its key rate at a historic low of 0.50 percent in a split vote for the third straight time at the meeting held early this month as a majority of members noticed increased risks from slowing global economy, especially in euro area.

Meanwhile, incoming President of the EU executive Jean-Claude Juncker said he plans to present a EUR 300 billion investment package to bolster growth and create employment.

"If you give us your support today, we will present the jobs, growth and investment package before Christmas," Juncker told the European Parliament in Strasbourg.