Crude Oil Ends Lower As Gasoline Stockpile Surges

(RTTNews) - U.S. crude oil dropped sharply to end lower Wednesday, after the official Energy Information Administration's weekly report showed a significant, more-than-expected jump in U.S. gasoline stockpile last week, notwithstanding a massive drop in crude oil inventories.

Latest data from the Energy Information Administration showed U.S. crude oil inventories to have dipped 10.60 million barrels, while gasoline stocks jumped 6.70 million barrels in the week ended December 6. Analysts expected crude oil inventories to fall by 3.0 million barrels and gasoline stocks to add 1.80 million barrels last week.

The news TransCanada started filling its 0.7 million bpd oil pipeline earlier this week which is expected to ease the supply glut at Cushing, did little to ease investor sentiments.

Earlier today, the International Energy Agency in its monthly Oil Market Report, moved up its global oil demand forecast for the year 2013 and 2014 by 1.2 million barrels per day (mbd) each on stronger-than-expected third quarter 2013 OECD demand growth

Light Sweet Crude Oil futures for January delivery, the most actively traded contract, dropped $1.07 or 1.1 percent to close at $97.44 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for January delivery scaled a high of $98.75 a barrel intraday and a low of $97.20.

Yesterday, oil rose over 1 percent to settle at a six-week high on some recent upbeat economic data lifted investor sentiments even as the dollar weakened against a basket of major currencies.

The OPEC, in its oil market report on Tuesday, maintained its 2014 global oil demand forecast at 1.0 mbd and that of 2013 at 0.90 mbd, and noted that the bulk of next year's growth is expected to come from the non-OECD, which is seen increasing by 1.2 mbd, while OECD demand is projected to contract by 0.2 mbd.

Late Tuesday, the API said U.S. crude oil inventories dipped by 7.50 million barrels in the weekended December 6.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.88 on Wednesday, down from 79.98 late Tuesday in North American trade. The dollar scaled a high of 80.06 intraday and a low of 79.76.

The euro traded higher against the dollar at $1.3794 on Wednesday, as compared to its previous close of $1.3761 late Tuesday in North America. The euro scaled a high of $1.3810 intraday and a low of $1.3742.

In economic news from the eurozone, Germany's EU harmonized inflation increased in November as estimated earlier, final figures released by the Federal Statistical Office showed. Inflation as per the harmonized index of consumer prices rose to 1.6 percent in November from 1.2 percent in October. The November figure matched the preliminary estimates.

Meanwhile, the Asian Development Bank maintained a steady growth estimate for Asia, citing improving outlook in Japan and the United States paired with stronger-than-expected performance in China. The Manila-based ADB has forecast 6 percent growth for 45-member nations and 6.2 percent in 2014. The figures were in line with its estimate published in October.

The GDP outlook for People's Republic of China was increased by 0.1 percentage points to 7.7 percent in 2013 and 7.5 percent in 2014 on the back of rising infrastructure investment. India is forecast to grow 4.7 percent in fiscal year 2013 on the back of a rebound in exports and higher industrial and agricultural outputs. For 2014, growth in India is seen at 5.7 percent. Both estimates were left unchanged.

According to ADB, South Asia is on track to meet growth expectations of 4.7 percent in 2013 and 5.5 percent in 2014. However, Southeast Asia's growth was downgraded to 4.8 percent from 4.9 percent this year and to 5.2 percent in 2014 from 5.3 percent.