Crude Oil Plummets To End Below $45 A Barrel; Supplies Decline

(RTTNews) - U.S. crude oil futures plummeted for a second straight session to end sharply lower on Wednesday, after a report from the U.S. Energy Information Administration showed an increase in domestic production with the upcoming refinery maintenance season. The drop in prices is despite a more than expected decline in U.S. crude stockpiles last week.

Early Wednesday, data from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have dropped 1.9 million barrels in the week ended September 18, while analysts anticipated a decline of 0.7 million barrels. Total U.S. crude stockpiles aggregated 454.0 million barrels end last week, at levels not seen for this time of year in the last 80 years.

Gasoline supplies rose 1.4 million barrels, with analysts anticipating an increase of 0.45 million barrels last week. Distillate stockpiles, including heating oil, fell 2.1 million barrels last week, even as analysts expected an increase of 1.3 million barrels.

The EIA said refinery crude runs dropped 310,000 barrels per day, while refinery utilization rates fell by 2.2 percentage points.

Total domestic oil production rose 19,000 barrels to 9.14 million barrels a day.

Meanwhile, data from the oil and gas industry trade group, the American Petroleum Institute late Tuesday said crude supplies fell 3.7 million barrels end last week.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, plunged $1.88 or 4.1 percent, to settle at $44.48 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for November delivery scaled a high of $47.15 a barrel intraday and a low of $44.51.

On Tuesday, crude oil dropped $0.60 or 1.3 percent, to settle at $46.36 a barrel, on demand growth concerns, ahead of the weekly crude inventory data amid worries supplies will outstrip demand.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.19 on Wednesday, down from its previous close of 96.32 in late North American trade on Tuesday. The dollar scaled a high of 96.55 intraday and a low of 96.11.

The euro trended higher against the dollar at 1.1200 on Wednesday, as compared to its previous close of 1.1128 in North American trade late Tuesday. The euro scaled a high of 1.1200 intraday and a low of 1.1105.

On the economic front, U.S. manufacturing activity in September matched its slowest pace of growth in 22 months, a flash reading from Markit showed Wednesday. The flash PMI came in unchanged at 53.0 last month, the lowest level since October 2013.

Chinese manufacturing activity contracted the most in six-and-a-half years in September, as orders and production declined at faster rates. The flash manufacturing Purchasing Managers' Index fell to 47 in September from 47.3 in August, survey data from Caixin Insight Group and Markit showed Wednesday. This was the lowest score in 78 months and was below the consensus estimate of 47.5.

Data from Markit showed that the flash Eurozone services Purchasing Managers' Index declined to 54 in September from 54.4 in the prior month. It was below the expected score of 54.2. The manufacturing PMI fell to 52, in line with forecast, from 52.3 in August. The composite output index dropped to 53.9 from 54.3 in August. It was expected to fall to 54.

Eurozone private sector growth eased slightly in September but the overall economic growth is expected to be maintained at 0.4 percent in the third quarter underpinned by new orders. The composite output index dropped to 53.9 in September from 54.3 in August, flash data from Markit revealed Wednesday. Nonetheless, it was below the expected score of 54.

Germany's private sector growth slowed slightly in September, flash data from Markit showed Wednesday. The composite output index fell to 54.3 in September from 55 in August.

The French private sector growth improved in September as both manufacturing and services expanded from prior month, flash survey data from Markit showed Wednesday. The flash composite output index rose to 51.4 in September from 50.2 in August. Private sector output expanded for the eighth successive month.

The French economy stalled as estimated in the second quarter, final data from the statistical office Insee showed Wednesday. Gross domestic product remained stable after expanding 0.7 percent in the first quarter and 0.1 percent in the fourth quarter of 2014. The second quarter growth rate came in line with the estimate published on August 14.