Crude Oil Plummets To End Below $98 A Barrel

(RTTNews) - U.S. crude oil plummeted for a third straight session to end at a near five-month low Wednesday, on demand growth concerns after an official weekly oil report from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have jumped nearly three times more than expected last week. Prices also came under severe pressure on news reports of U.S. plans to release about 5 million barrels of oil from its Strategic Petroleum Reserve.

Earlier today, data from the Energy Information Administration revealed U.S. crude oil inventories to have jumped by 6.2 million barrels in the week ended March 7, while analysts expected an increase of 2.3 million barrels. Gasoline stocks unexpectedly dropped by 5.2 million barrels last week, with analysts anticipating a decline of 1.8 million barrels. Inventories of distillate, including heating fuel, dropped by 0.5 million barrels, even as analysts anticipated a decline of 0.9 million barrels.

Late Tuesday, the American Petroleum Institute report expected an increase of 1.2 million barrels in crude supplies for the week ended March 7.

In some disappointing data from the eurozone, industrial production declined unexpectedly in January due to the ongoing contraction in energy output, reflecting the fragile nature of economic recovery in the area.

Investors largely ignored the turn of events in Ukraine, even as the geopolitical tensions arising over Russia's involvement in the Crimean region mounted with leaders of the Group of Seven cautioning against any attempt to annex Ukraine's Crimea region. The West has also demanded the referendum in Crimea slated for Sunday be called off. The crucial referendum seeks to get Crimean people's approval to enable the region merge with Russia, with the regional parliament having already voted overwhelmingly to become part of Russia.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, plummeted $2.04 or 2.0 percent to close at $97.99 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for April delivery scaled a high of $99.60 a barrel intraday and a low of $97.55.

Yesterday, crude oil prices declined sharply on some disappointing Chinese economic data, indicative of reduced demand for energy. China's exports unexpectedly plunged over 18 percent last month, with the trade balance swinging into a deficit of $22.98 billion.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.63 on Wednesday, down from its previous close of 79.79 late Tuesday in North American trade. The dollar scaled a high of 79.86 intraday and a low of 79.56.

The euro traded higher against the dollar at $1.3901 on Wednesday, as compared to its previous close of $1.3860 late Tuesday in North America. The euro scaled a high of $1.3913 intraday and a low of $1.3844.

In economic news, eurozone industrial output fell 0.2 percent month-on-month in January, which was the second consecutive drop, Eurostat said Wednesday. Economists expected production to expand 0.5 percent, after a revised 0.4 percent drop in December.

Sector-wise, energy production declined 2.5 percent as seen in December. Durable consumer goods output slipped 0.6 percent, in contrast to a 0.8 percent rise a month ago. Likewise, production of intermediate goods slipped 0.1 percent. Partially offsetting these declines, capital goods gained 0.9 percent and non-durable consumer goods rose 0.4 percent.