Crude Oil Plummets To End Below $86 On Demand Growth Concerns

(RTTNews) - U.S. crude oil plummeted for a third straight session to end lower on Thursday, as investors continued to worry over demand growth prospects and a supply glut, even as the U.S. Federal Reserve cut its growth outlook for the economy.

On Wednesday, an official weekly oil report from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have climbed more than expected last week.

The International Monetary Fund's downward revision to its outlook for the global economy and a reduction in oil prices by Saudi Arabia's Aramco also contributed to oil's decline.

On the economic front, in another upbeat sign for the job market, a Labor Department report on Thursday showed an unexpected drop in first-time claims for U.S. unemployment benefits in the week ended October 4.

Meanwhile, a Commerce Department report showed a bigger than expected increase in wholesale inventories in the U.S. in August, with a matching decrease in wholesale sales.

Light Sweet Crude Oil futures for November delivery, the most actively traded contract, plunged $1.54 or 1.8 percent to close at $85.77 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for November delivery scaled a high of $87.95 a barrel intraday and a low of $85.60.

On Wednesday, crude oil plunged on demand growth concerns after an official weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have climbed more than expected last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.51 on Thursday, up from its previous close of 85.32 late Wednesday in North American trade. The dollar scaled a high of 85.67 intraday and a low of 84.94.

The euro trended lower against the dollar at $1.2701 on Thursday, as compared to its previous close of $1.2734 late Tuesday in North American trade. The euro scaled a high of $1.2791 intraday and a low of $1.2666.

In economic news from the U.S., a report from the Labor Department showed initial jobless claims to have unexpectedly edged down to 287,000 in the week ended October 4th, from the previous week's revised level of 288,000. Economists had expected claims to have climbed to 294,000 from 287,000 originally reported for the previous week.

A Commerce Department report showed wholesale inventories to have increased 0.7 percent in August after edging up by an upwardly revised 0.3 percent in July. Economists expected inventories to rise by 0.3 percent compared to the 0.1 percent uptick originally reported for the previous month.

Meanwhile, the report also showed wholesale sales to have dropped 0.7 percent in August following a 0.4 percent increase in July.

From the eurozone, German exports logged its biggest fall since early 2009, making it harder for the largest eurozone economy to recover from the contraction seen in the second quarter, data from Destatis revealed Thursday. Exports fell a more-than-expected 5.8 percent month-over-month in August following the 4.8 percent rise in July. Shipments were forecast to drop by 4 percent. The latest decline was the largest since January 2009.

Elsewhere, eurozone house prices increased in the second quarter after falling for two consecutive quarters, data from Eurostat showed Thursday. House prices climbed 0.9 percent sequentially in the second quarter following a 0.2 percent drop in the prior quarter. On a yearly basis, house prices remained flat after easing 0.4 percent a quarter ago. House prices in the EU climbed 1.4 percent in the second quarter from the prior quarter and increased 1.7 percent from the same period of last year.

The Bank of England maintained its key policy rate at a historic low once again as policymakers await more concrete signs of the economic recovery becoming sustainable amid slowing inflation. The nine-member Monetary Policy Committee decided on Thursday to retain its key rate at a record low 0.50 percent and the asset purchase program at GBP 375 billion.