Crude Oil Ends Below $92 Amid Demand Growth Concerns

(RTTNews) - U.S. crude oil dropped sharply to end at an eight-month low Wednesday, on continued demand growth concerns after the OPEC slashed its 2015 growth forecast for oil. A weekly report from the Energy Information Administration showed U.S. crude stockpiles to have dropped less than expected last week.

The Organization of the Petroleum Exporting Countries cut its 2015 forecast for oil demand growth, revising downward the estimated demand for its crude by 200,000 barrels a day.

Earlier today, a U.S. Energy Information Administration report showed U.S. crude oil inventories to have dropped 1.0 million barrels in the week ended September 5, while analysts expected a decline of 1.2 million barrels. The EIA report showed U.S. crude oil inventories at 358.6 million barrels, end last week.

Gasoline stocks increased by 2.4 million barrels last week, with analysts anticipating a decline of 0.2 million barrels. Inventories of distillate, including heating fuel, rose 4.1 million barrels last week, while analysts projected an increase of 0.4 million barrels.

Data released by the American Petroleum Institute late Tuesday showed crude oil stockpiles to have declined by a more than expected 1.2 million barrels last week.

Investors await the outcome of the U.S. Federal Reserve's two-day policy meet next week, with the asset purchase program expected to end in October. Markets continued to speculate over an imminent hike in interest rates, much sooner than initially expected. It is widely expected the Federal Reserve will cut its monthly bond-buying program by $10 billion at its September 16-17 meet, with expectations of probable clues as to when it may hike interest rates.

In an earlier report, the San Francisco Federal Reserve opined that the markets were underestimating the Fed's timeline for raising rates in light of mostly positive economic data.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, declined $1.08 or 1.2 percent to close at $91.67 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for October delivery scaled a high of $93.03 a barrel intraday and a low of $91.22.

On Tuesday, crude oil futures ended up $0.09 at $92.75 a barrel, well off the day's high of $93.94 a barrel.

A strong dollar is also weighing on crude oil prices, with the rising to its highest in more than a year versus a basket of major rivals.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.25 on Wednesday, up from its previous close of 84.17 late Tuesday in North American trade. The dollar scaled a high of 84.42 intraday and a low of 84.05.

The euro trended lower against the dollar at $1.2906 on Wednesday, as compared to its previous close of $1.2938 late Tuesday in North American trade. The euro scaled a high of $1.2963 intraday and a low of $1.2884.

In economic news from the U.S., a Commerce Department report showed wholesale inventories to have risen by a modest 0.1 percent in July, after inching up by a downwardly revised 0.2 percent in June. Nonetheless, the uptick in inventories fell short the forecast for 0.5 percent increase.