Crude Oil Surges To End Above $104 On Supply Data, Fed

(RTTNews) - U.S. crude oil soared for a fourth straight session to end at a one-month high on Wednesday, after an official weekly oil report from the Energy Information Administration showed a massive, more-than-expected drop in U.S. crude oil stockpiles. Oil prices further moved up following the release of minutes from the U.S. Federal Reserve's April policy meet, which showed little clarity as to when the Fed will hike its benchmark interest rate from the current near zero level.

The minutes of the most recent U.S. Federal Reserve meeting said discussions about when to raise interest rates do not mean that a hike is imminent. In April, the Fed kept its benchmark rate unchanged at historic low levels near zero and tapered quantitative easing (QE3) by another $10 billion.

Before voting on that action, policy makers examined "several approaches" for tightening but have not decided on the appropriate mix of tools to wind down its unprecedented support for the U.S. economy.

Data from the U.S. Energy Information Administration earlier Wednesday showed U.S. crude oil inventories to have dropped 7.20 million barrels in the week ended May 16, while analysts expected a modest decline of 0.3 million barrels. Stockpiles aggregated 391.3 million barrels, up from the earlier week's total of 398.5 million barrels.

Gasoline stocks rose by 1.0 million barrels last week, while analysts anticipated an increase of 0.15 million barrels. Inventories of distillate, including heating fuel, increased 3.4 million barrels, even as analysts anticipated a decrease of 0.25 million barrels.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, surged $1.74 or 1.7 percent to close at $104.07 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for July delivery scaled a high of $104.29 a barrel intraday and a low of $102.78.

On Tuesday, a report from the American Petroleum Institute showed crude supplies to have dropped by a more than expected 10.3 million barrels for the week ended May 16.

On Tuesday, crude oil futures ended higher amid concerns over supply disruptions from Russia and Libya.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.19 on Wednesday, up from its previous close of 80.04 late Tuesday in North American trade. The dollar scaled a high of 80.30 intraday and a low of 79.89.

The euro traded lower against the dollar at $1.3663 on Wednesday, as compared to its previous close of $1.3701 late Tuesday in North America. The euro scaled a high of $1.3723 intraday and a low of $1.3636.

In economic news, eurozone's consumer confidence rose more-than-expected in May to its highest level in nearly seven years, preliminary figures from the European Commission showed Wednesday. The consumer confidence index for the 18 nations came in at -7.1 as compared to -8.6 in April. Economists had forecast a score of -8.3.

British retail sales volume, including automotive fuel, grew 1.3 percent month-on-month in April, more than double the 0.5 percent rise in March, the Office for National Statistics said. The growth rate was forecast to ease to 0.4 percent from the originally estimated 0.1 percent rise. Growth in sales excluding automotive fuel accelerated to 1.8 percent from 0.1 percent, exceeding economists' consensus of 0.5 percent rise.

Meanwhile, the Bank of Japan left its monetary policy unchanged on Wednesday and raised its assessment of capital expenditure as the economy is expected to withstand the impact of sales tax hike.

Elsewhere, China's economy added 4.73 million jobs in the first four months of 2014, which was higher by 30,000 from the same period last year, the Chinese Ministry of Human Resources and Social Security said Wednesday.