Crude Oil Plunges To 3-Year Low, Ends Below $75 A Barrel

(RTTNews) - U.S. crude oil plummeted to new depths to close at a four-year low Thursday, on increasing concerns of a supply glut despite a decline in U.S. stockpiles last week as indicated by the U.S. Energy Information Administration's inventory report.

Investors expect the Organization of the Petroleum Exporting Countries to maintain its current production levels despite the sharp fall in prices at its meeting scheduled on November 27.

Reports suggest the OPEC member countries will maintain the current production levels despite falling prices, with Saudi Arabia and Iraq having already chosen to reduce prices rather than going in for a production cut.

Some tepid data showing initial claims for unemployment benefits in the U.S. also impacted oil prices, with first-time claims rising more than anticipated to a six-week high in the week ended November 8.

In some more soft economic data, China's industrial production and retail sales growth slowed unexpectedly in October, while fixed investment grew less-than-expected, data from the National Bureau of Statistics showed Thursday.

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, plunged $2.97 or 3.8 percent to close at $74.21 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for December delivery scaled a high of $77.16 a barrel intraday and a low of $74.96.

On Wednesday, crude oil futures ended down $0.76 or 1.0 percent at $77.18 a barrel.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped by 1.7 million barrels in the week ended November 7, which was well below analysts expectation of a 0.5 million barrels decline. The EIA report showed U.S. crude oil inventories at 378.5 million barrels, end last week.

Gasoline stocks rose 1.8 million barrels last week, while analysts anticipated a decrease of 0.3 million barrels. Inventories of distillate, including heating fuel, dropped 2.8 million barrels last week, while analysts anticipated a decline of 1.6 million barrels.

Data from the American Petroleum Institute showed U.S. crude inventories to have declined by 1.5 million barrels in the week ended November 7.

A report from the Organization of the Petroleum Exporting Countries showed crude production to have dropped 226,400 barrels a day to 30.25 million barrels a day. Crude production from non-OPEC countries increased by 250,000 barrels of oil a day, with OPEC share of crude oil production dropping to 32.7 percent, compared with 33 percent in September.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.67 on Thursday, down from its previous close of 87.84 late Wednesday in North American trade. The dollar scaled a high of 87.88 intraday and a low of 87.62.

The euro trended higher against the dollar at $1.2485 on Thursday, as compared to its previous close of $1.2438 late Wednesday in North American trade. The euro scaled a high of $1.2491 intraday and a low of $1.2428.

In economic news, first-time claims for U.S. unemployment benefits for the week ended November 8, climbed to 290,000, an increase of 12,000 from the previous week's unrevised level of 278,000. Economists expected claims to move up to 280,000. Jobless claims was at its highest level since hitting 295,000 in the week ended September 20.

China's industrial production and retail sales growth slowed unexpectedly in October, while fixed investment grew less-than-expected, data from the National Bureau of Statistics showed Thursday. Industrial production rose 7.7 percent year-over-year in October following the 8 percent growth in September. Economists expected production to rise at the stable rate of 8 percent.

Fixed asset investment grew at its slowest pace since 2001, rising 15.9 percent in the January-October period.

In news from the eurozone, results of the latest survey of Professional Forecasters published in the ECB's monthly bulletin showed that the inflation outlook for next year was slashed to 1 percent from 1.2 percent seen earlier. The projection for this year was lowered to 0.5 percent from 0.7 percent. The growth forecast for next year has been reduced to 1.2 percent from 1.5 percent earlier, and the outlook for this year has been cut to 0.8 percent from 1 percent.