RTTNews - Crude oil dropped sharply on Wednesday after Energy Information Administration data revealed a sharp rise in weekly inventories. Oil closed at a 12-day low after reaching a three-week high earlier in the week.
Light sweet crude for September delivery dropped to $62.85 per barrel, down $4.38 on the session. Prices dipped as low as $62.70 earlier in the session after coming within a penny of $69 on Tuesday.
U.S. commercial crude oil inventories increased by 5.1 million barrels during the week ended July 24. Experts were looking for a build of about 1.1 million barrels. At 347.8 million barrels,
Total motor gasoline inventories decreased by 2.3 million barrels last week. Economists were looking for a drop of about 1.1 million barrels. Distillate fuel inventories increased by 2.1 million barrels. Experts were forecasting an increase of about 1 million barrels.
Late Tuesday afternoon, the American Petroleum Institute reported crude oil inventories increased by about 4.1 million barrels to 352.4 million in the week ended July 24. The API report is not as closely watched as the EIA data because participation in the API survey is voluntary.
The dollar saw strength versus the rival euro on Wednesday, further reducing oil's value as a hedge investment. The greenback climbed to a 10-day high against the European currency and challenged the 1.4000 mark after testing an eight-month low near 1.4300 earlier in the week.
In economic news on Wednesday, a Commerce Department report showed that durable goods orders fell by 2.5 percent in June following a downwardly revised 1.3 percent increase in May. Economists had expected orders to fall by 0.6 percent compared to the 1.8 percent increase originally reported for the previous month.
In the afternoon, the Federal Reserve's Beige Book report said that economic activity continued to be weak going into the summer, but noted that most of the 12 Fed districts indicated that the pace of decline has moderated or that activity has begun to stabilize.
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