Crude Oil Ends Lower After IEA Report

(RTTNews) - U.S. crude oil ended sharply lower Thursday, after the International Energy Agency projected increased supply from sources outside the Organization of Petroleum Exporting Countries, which could outstrip demand. Yesterday, crude oil surged 3 percent after a sharp drop in U.S. inventories. Investors also weighed some weak initial jobless claims data from the U.S., notwithstanding the dollar weakening against a basket of major currencies.

Earlier today, the International Energy Agency forecast supply from non-OPEC countries to grow 1.3 million barrels a day next year, with supplies to rise 1.2 million barrels a day this year. The agency also lifted its global oil demand forecast for 2013 and has forecast demand to grow by 1.2 mbd in 2014.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, dropped $1.61 or 1.5 percent to close at $104.91 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for August delivery scaled a high of $107.45 a barrel intraday and a low of $104.31.

Yesterday, oil soared 3 percent to end at a near sixteen-month high after an official Energy Information Administration weekly oil report showed U.S. crude oil inventories to have declined more than three times what analysts estimated. Oil also found support with the ongoing political turmoil in Egypt, fueling concerns the situation could disrupt oil shipments through the Suez Canal.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.91 on Thursday, down from 83.09 late Wednesday in North American trade. The dollar scaled a high of 83.25 intraday and a low of 82.42. Nonetheless, the greenback was way behind its early high of 84.49.

The euro traded higher against the dollar at $1.3063 on Thursday, as compared to $1.2976 late Wednesday in North America. The euro scaled a high of $1.3204 intraday and a low of $1.2966.

In economic news from the U.S., the Labor Department said initial jobless claims rose to 360,000, an increase of 16,000 from the previous week's revised figure of 344,000. The increase surprised economists, who had been expecting jobless claims to ease to 340,000 from the 343,000 originally reported for the previous week.

In a separate report, the department said imports prices fell by 0.2 percent in June following a revised 0.7 percent decrease in May. Economists had been expecting import prices to inch up by 0.1 percent. Additionally, the report said export prices edged down by 0.1 percent in June after dropping by 0.5 percent in the previous month. The drop in export prices matched economist estimates.

From the eurozone, Germany's whole sale prices increased modestly in June after falling for two months in a row, latest data from the Federal Statistical Office showed. The wholesale price index increased 0.7 percent on an annual basis in June, reversing decreases of 0.1 percent and 0.4 percent recorded in May and April. Economists were looking for an increase of 1 percent.

Meanwhile, the Bank of Japan on Thursday decided to keep its monetary easing program unchanged, while upwardly revising its assessment of the economy citing signs of recovery. The nine-member policy board unanimously decided to keep the target of the monetary base expansion at an annual pace of JPY 60-70 trillion, in line with expectations.