Oil prices dropped nearly 4% to below $68.50 a barrel during yesterday's trading session. This drop came after a U.S. government report showed Crude Oil inventories rose more than expected, rekindling worries that energy demand in the world's biggest consumer will be slow to recover in the wake of the recession.
The International Energy Agency (IEA) said that the inventories rose to 2.8 million barrels in the week September 18, against analysts' expectations of a 1.5 million barrel decline.
A weak Dollar had been propping up prices recently. The greenback was narrowly mixed against the JPY, EUR and GBP on Wednesday. Oil, like other commodities, is priced in dollars so when the U.S. currency weakens, commodities become cheaper for investors holding other currencies.
As for today, traders should pay attention to the U.S Unemployment Claims report as it has tended to have an impact on Crude Oil's prices recently, especially in the short-term.