Crude Oil Ends Higher As Supplies Decline

(RTTNews) - U.S. crude oil snapped a five-day losing streak to end higher on Wednesday, after official data from the Energy Information Administration showed crude stockpiles in the U.S. to have declined more than expected last week, although production continued to remain firm.

Earlier today, a weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories dropped 2.7 million barrels in the week ended May 15, while analysts expected a decline of 2.0 million barrels. The report showed U.S. crude oil inventories at 482.2 million barrels end last week. This is the third straight week of crude oil inventories decline.

EIA said crude oil output in the U.S. remained firm at 8.87 million barrels a day.

Gasoline stocks dropped 2.8 million barrels last week, with analysts anticipating a decline of 0.7 million barrels. Inventories of distillate, including heating fuel, dipped 546,000 barrels, with analysts expecting a drop of 560,000 barrels.

Data from the oil and gas industry trade group American Petroleum Institute late Tuesday showed U.S. crude oil stocks dropped 5.2 million barrels last week.

Crude oil prices trimmed losses as fighting in Yemen continues to escalate. The civil war in Yemen has become a proxy conflict between Iran and Saudi Arabia.

An Iranian ship supposedly containing humanitarian supplies is set to dock in Yemen without the inspection called for by the U.S. and Saudis.

A 24-inch pipeline, owned by Houston-based Plains All American Pipeline, broke along the Santa Barbara coast Tuesday, leaking about 21,000 gallons of crude oil near a beach in California.

Nevertheless, oil production continues to outstrip demand after the U.S. shale oil production surge and the OPEC's decision last year not to cut production.

Light Sweet Crude Oil futures for July delivery, the most actively traded contract, jumped $0.99 or 1.7 percent, to settle at $58.98 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for July delivery scaled a high of $59.04 a barrel intraday and a low of $58.10.

On Tuesday, crude oil for July delivery plummeted $2.25 or 3.7 percent, to settle at $57.99 percent, its lowest closing for the month, as the dollar soared against some major currencies after comments from European Central Bank officials on its asset purchases.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.35 on Wednesday, up from its previous close of 95.31 on Tuesday in late North American trade. The dollar scaled a high of 95.84 intraday and a low of 95.26.

The euro trended lower against the dollar at $1.1119 on Wednesday, as compared to its previous close of $1.1149 in North American trade late Tuesday. The euro scaled a high of $1.1154 intraday and a low of $1.1065.

On the economic front, Bank of England kept its monetary policy stance unchanged unanimously at the meeting held early this month. The meet also suggested the next action would be a hike in interest rate, but such a move is unlikely until 2016. The key interest rate will be kept at a record low of 0.50 percent and asset purchase program at GBP 375 billion.

The leading index for Japan, which measures future economic activity, increased more than initially estimated in March, to 106.0, revised from the preliminary estimate of 105.5. The score for February was 105.3.

Japan's gross domestic product climbed 0.6 percent on quarter in the first quarter of 2015, the Cabinet Office said in Wednesday's preliminary reading. That topped expectations for an increase of 0.4 percent, and it was up from the downwardly revised 0.3 percent rate of growth in the fourth quarter.

Eurozone construction output increased in March, after declining in the previous month, data from Eurostat showed Wednesday. Construction output rose 0.8 percent month-over-month in March, reversing a 1.6 percent decrease in February, which was revised from a 1.8 percent drop reported earlier.

Germany's producer prices declined at a slightly faster-than-expected pace in April, figures from Destatis showed Wednesday. The producer price index fell 1.5 percent year-over-year in April, just above economists' expectations for a 1.4 percent decrease.

UK households' finance outlook worsened for the first time in eight months in May, while their financial woes eased to a record low, results of a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday. The seasonally adjusted Markit Household Finance Index rose slightly to 45.8 in May from 45.7 in the previous month.

The United Nations lowered its global economic growth forecast by 0.3 percentage points due to deterioration in the prospects of the economies in transition and several large developing countries, especially in South America, a UN report showed Tuesday.

The growth of world gross domestic product is expected to improve slightly to 2.8 percent in 2015 from 2.6 percent in 2014, a downward revision by 0.3 percentage points from the forecast presented in the World Economic Situation and Prospects 2015 (WESP) in January.

The global growth is expected to improve to 3.1 percent in 2016, which is still well below the pre-crisis pace, the report stated. Previously, the global economy was projected to grow by 3.3 percent in 2016.