RTTNews - Crude oil prices dropped on Wednesday as a surprise draw in weekly inventories reported by Energy Information Administration was out-weighed by weak demand data.

Light sweet crude for June delivery closed at $58.02, down 83 cents on the session. Earlier, oil touched as high as $59.90, challenging yesterday's six-month high of $60.08.

U.S. commercial crude oil inventories decreased by 4.7 million barrels in the week ended May 8. Experts were looking for an increase of about 1.4 million barrels.

Total motor gasoline inventories decreased by 4.1 million barrels last week. Experts were calling for a build of about 400,000 barrels.

However, data also showed that demand for the recent four-week period averaged nearly 18.2 million barrels per day, down by 7.9 percent compared to the similar period last year.

The American Petroleum Institute said yesterday after the close of floor trading that stockpiles were down 3.13 million barrels last week. Refineries are required to participate in the government data but not the API report.

Earlier, the Organization of Petroleum Exporting Countries cut its global demand estimate for this year to 84.03 million barrels per day, a drop of 150,000 barrels. Demand is expected to fall by 1.57 million barrels per day.

OPEC also announced it boosted production in April for the first time since July. The cartel implemented about 77% of the 4.2-million in cuts announced late last year.

On the economic front, a Commerce Department report showed that retail sales fell 0.4 percent in April following a revised 1.3 percent decrease in March. Economists had expected sales to come in unchanged compared to the 1.2 percent decrease originally reported for the previous month.

A Labor Department report showed that import prices jumped 1.6 percent in April following a much more modest 0.2 percent increase in March. The increase in import prices marked the fastest pace of growth since a 3.0 percent increase in June of 2008.

The report also showed that export prices rose 0.5 percent in April after falling 0.7 percent in March. The increase was partly due to a 3.6 percent increase in prices of agricultural exports, although prices still rose 0.3 percent excluding agricultural exports.

A separate Commerce Department report revealed business inventories fell by 1.0 percent in March following a revised 1.4 percent decrease in February. Market analysts forecast inventories to fall by 1.1 percent compared to a 1.3 percent drop originally reported last month.

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