October crude oil spent most of the overnight and early morning hours in negative territory. Traders said that private industry data late Tuesday that showed a much larger than expected drop in US crude inventories last week offered early support. However, those gains were short lived, pressured by early strength in the US Dollar and fears that the European debt crisis will further limit demand prospects. Some traders indicated that yesterday's rally in October crude oil to its highest level since August 4th yesterday might have encouraged a level of profit-taking overnight.
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