U.S. crude oil ended lower Wednesday, on demand growth concerns with the situation in eastern Ukraine continuing to escalate. Investors also continued to monitor the situation in Ukraine where Russia has reportedly positioned its forces along the border, indicative of a possible invasion.
Investors also mulled over the official weekly report from the Energy Information Administration that showed U.S. crude oil stockpiles to have dropped more than expected last week.
Earlier today, a report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped 1.8 million barrels in the week ended August 1, while analysts anticipated a decline of 1.7 million barrels. The EIA report showed U.S. crude oil inventories at 365.60 million barrels, end last week.
Gasoline stocks decreased by 4.4 million barrels last week, with analysts anticipating an increase of 0.3 million barrels. Inventories of distillate, including heating fuel, dropped 1.8 million barrels, while analysts expected an increase of 0.9 million barrels.
On Tuesday, the American Petroleum Institute released a report that showed U.S. crude inventories to have declined by much more than expected 5.5 million barrels last week.
Light Sweet Crude Oil futures for September delivery, the most actively traded contract, dropped $0.46 or 0.5 percent to close at $96.92 a barrel on the New York Mercantile Exchange Wednesday.
Crude prices for September delivery scaled a high of $98.13 a barrel intraday and a low of $96.69.
On Tuesday, crude oil futures ended lower on continued concerns over the developments in Ukraine, with pro-Russian separatists firing on unarmed Ukraine soldiers.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.48 on Wednesday, down from its previous close of 81.53 late Wednesday in North American trade. The dollar scaled a high of 81.72 intraday and a low of 81.41.
The euro traded lower against the dollar at $1.3371 on Wednesday, as compared to its previous close of $1.3376 late Tuesday in North American trade. The euro scaled a high of $1.3386 intraday and a low of $1.3334.
In economic news from the U.S., a report from the Commerce Department showed U.S. trade deficit to have shrunk 7 percent to $41.5 billion in June, due largely to a notable drop in petroleum imports. Economists expected the trade deficit to widen to $45 billion from $44.4 billion in May.
The Italian economy re-entered recession as the gross domestic product contracted for the second consecutive time during the three months to June, preliminary estimates from the statistical office Istat showed Wednesday. Italy’s gross domestic product fell unexpectedly by 0.2 percent sequentially in the second quarter, the fastest decline in a year. Economists expected the economy to expand 0.1 percent.
Italy’s GDP expanded only in one quarter since the second quarter of 2011. Year-on-year, GDP decreased 0.3 percent with economists anticipating a growth of 0.1 percent for the second quarter.
British industrial production rebounded less-than-expected in June, with industrial and manufacturing output rising 0.3 percent each in June, the Office for National Statistics said Wednesday. Economists expected industrial production and manufacturing output to rise 0.6 percent.
Meanwhile, German factory orders declined unexpectedly by an adjusted 3.2 percent in June from May, when it fell by a revised 1.6 percent, Destatis reported Wednesday. Economists had forecast a 0.9 percent increase for June. The decline was the biggest since September 2011, when orders plunged by 3.4 percent.
Traders are also gearing up for Thursday’s policy statement from the European Central Bank, looking for indication about further stimulus to revive the sagging eurozone economy.
The material has been provided by InstaForex Company – www.instaforex.com