Crude Oil Ends Below $95 After Supply Data

(RTTNews) - U.S. crude oil ended sharply lower on Thursday, after a weekly official oil report from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have dropped less than expected last week. The drop came amidst a strong dollar with some positive economic data out of the U.S.

Earlier today, a report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have dropped 0.9 million barrels in the week ended August 29, while analysts anticipated a decline of 2.0 million barrels. The EIA report showed U.S. crude oil inventories at 359.6 million barrels, end last week.

Gasoline stocks dropped by 2.3 million barrels last week, with analysts anticipating a decline of 1.3 million barrels. Inventories of distillate, including heating fuel, rose 1.3 million barrels last week, with analysts projecting a decline of 1.2 million barrels,

According to a report from the American Petroleum Institute released late Wednesday, U.S. crude inventories declined by a less than expected 545,000 barrels in the week ended August 29.

Investors also closely monitored the situation in Ukraine and Libya. According to reports, Ukraine and Russia are in agreement on the steps that are needed to effect a ceasefire.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, dropped $1.09 or 1.1 percent to close at $94.45 a barrel on the New York Mercantile Exchange Thursday.

Crude prices for October delivery scaled a high of $95.39 a barrel intraday and a low of $94.16.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.80 on Thursday, up from its previous close of 82.85 late Wednesday in North American trade. The dollar scaled a high of 83.87 intraday and a low of 82.84.

The euro trended lower against the dollar at $1.2941 on Thursday, as compared to its previous close of $1.3150 late Wednesday in North American trade. The euro scaled a high of $1.3153 intraday and a low of $1.2922.

In economic news from the U.S., private sector employment rose less than expected with 204,000 jobs in August following a downwardly revised increase of 212,000 jobs in July, data released by ADP showed. Economists expected jobs to rise by about 220,000 in the month.

According to a report from the Labor Department, first-time claims for U.S. unemployment benefits rose slightly more than expected to 302,000 in the week ended August 30, from the previous week's unrevised level of 298,000. Economists anticipated claims to tick up to 300,000 in August.

A Commerce Department report on Thursday showed U.S. trade deficit unexpectedly narrowed in July, reflecting moderate increases in the value of both imports and exports. U.S. trade deficit narrowed to $40.5 billion in July from a revised $40.8 billion in June. Economists expected the deficit to widen to $42.3 billion from the $41.5 billion originally reported for the previous month.

Meanwhile, labor productivity in the U.S. increased by less than previously estimated in the second quarter, rising 2.3 percent. Earlier estimates had pegged productivity growth at 2.5 percent. The report also said unit labor costs edged down by a revised 0.1 percent in the second quarter versus the 0.6 percent increase originally reported.

A report from the Institute for Supply Management showed activity in the U.S. service sector to have unexpectedly expanded at an accelerated rate to 59.6 in August, from 58.7 in the preceding month.

The European Central Bank which cut its key rates today, cut its growth forecast for this year to 0.9 percent from 1 percent predicted in June. The outlook for 2015 was lowered to 1.6 percent from 1.7 percent.

The inflation outlook for 2014 was cut to 0.6 percent from 0.7 percent, while projections for 2015 and 2016 were retained at 1.1 percent and 1.4 percent, respectively.