Crude Oil Ends Below $45 A Barrel On Supply Glut Concerns

(RTTNews) - U.S. crude oil dropped to end at a new four-month low on Thursday, amid continued worries of a global supply glut, notwithstanding an official data from the Energy Information Administration that showed crude stockpiles in the U.S. to have declined more than expected last week.

There was little reaction to news that U.S. inventories dropped last week. The Energy Information Administration said U.S. commercial inventories fell by 4.4 million barrels. Analysts expected a drop of only 1.6 million barrels.

U.S. rigs may be in line for a further reduction amid low prices, although reports say shale oil producers have been successful in cutting down costs to give traditional producers a run for their money.

However, the OPEC continues to ramp up production and Iranian oil expected to overwhelm markets as sanctions are lifted following a nuclear deal between Tehran and the West.

Light Sweet Crude Oil futures for September delivery, the most actively traded contract, dropped $0.49 or 1.1 percent, to settle at $44.66 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for September delivery scaled a high of $45.27 a barrel intraday and a low of $44.20.

On Wednesday, crude oil futures for September delivery dropped $0.59 or 1.3 percent, to settle at $45.15 a barrel, on continued supply glut fears despite official data from the Energy Information Administration showed crude stockpiles in the U.S. to have declined more than expected last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.87 on Thursday, down from its previous close of 97.89 in late North American trade on Wednesday. The dollar scaled a high of 98.16 intraday and a low of 97.63.

The euro trended higher against the dollar at $1.0916 on Thursday, as compared to its previous close of $1.0917 in North American trade late Wednesday. The euro scaled a high of $1.0945 intraday and a low of $1.0875.

On the economic front, first-time claims for U.S. unemployment benefits saw some further upside in the week ended August 1, following the rebound seen in the previous week, a Labor Department report showed Thursday. Initial jobless claims edged up to 270,000, an increase of 3,000 from the previous week's unrevised level of 267,000. Economists expected jobless claims to rise to 273,000. With the modest increase, jobless claims climbed further off the more than forty-year low of 255,000 set in the week ended July 18.

German manufacturing new orders surged in June, driven by robust demand from abroad, thanks to a weaker euro, dispelling concerns of a slowdown in the largest euro area economy.

Factory orders in Germany rose a seasonally-and-calendar adjusted 2 percent from May, when they declined 0.3 percent, the Federal Statistical Office said Thursday. May's drop was downwardly revised from the 0.2 percent fall estimated initially. Economists expected a mere 0.3 percent increase for the month. In April, orders grew 2.2 percent.

Germany's construction sector expanded at the weakest pace in six months in July, as output growth eased and new orders fell, survey figures from Markit Economics showed Thursday. The seasonally adjusted Purchasing Managers' Index, or PMI, dropped marginally to 50.6 in July from 50.7 in the previous month.

U.K. industrial production declined unexpectedly on a slump in oil and gas extraction in June, while manufacturing output recovered from the prior month.

Confounding expectations for a 0.1 percent increase, industrial production dropped 0.4 percent in June from May, when it rose a revised 0.3 percent, data from the Office for National Statistics revealed Thursday. This was the first fall in five months.

U.K. house prices dropped unexpectedly in July from June, data from Lloyds Banking Group's Halifax division revealed Thursday. House prices decreased 0.6 percent from June, which was the first fall in five months and confounding expectations for a 0.4 percent rise. Prices had increased 1.6 percent in June.