Crude Oil Ends Higher Despite Increase In Supplies

(RTTNews) - U.S. crude oil ended higher on Wednesday, despite official data from the Energy Information Administration that showed crude stockpiles in the U.S. to have increased more than expected last week.

Early Wednesday, data from the U.S. Energy Information Administration showed crude stockpiles in the U.S. to have increased 4.7 million barrels in the week ended August 28, while analysts anticipated a decline of 0.8 million barrels. Total U.S. crude stockpiles aggregated 455.4 million barrels end last week, at levels not seen for this time of year in the last 80 years. Gasoline supplies dropped 0.3 million barrels, while distillate stockpiles rose 0.1 million barrels last week.

Meanwhile, the American Petroleum Institute late Tuesday said crude supplies increased 7.6 million barrels end last week.

Crude oil prices were down for a second day Wednesday afternoon, trimming huge gains from the previous few sessions amid speculation that OPEC will maintain production.

Reports suggest that Saudi Arabia is digging in its heels, refusing to cut output despite pleas from other OPEC members like Venezuela, which cannot cope as easily with $40 oil.

In some encouraging economic news from the U.S., a report from the Labor Department showed a notable increase in private sector employment in the second quarter with a more than expected rise of 3.3 percent, ahead of Friday's jobs data.

Meanwhile, employment in the U.S. private sector recorded a notable increase in August, a report from payroll processor ADP showed Wednesday, although the pace of job growth came in short of economists' estimates.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, gained $0.84 or 1.9 percent, to settle at $46.25 a barrel on the New York Mercantile Exchange Wednesday. Crude prices for October delivery scaled a high of $46.77 a barrel intraday and a low of $43.21.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.81 on Wednesday, up from its previous close of 95.38 in late North American trade on Tuesday. The dollar scaled a high of 95.92 intraday and a low of 95.42.

The euro trended lower against the dollar at $1.1241 on Wednesday, as compared to its previous close of $1.1315 in North American trade late Tuesday. The euro scaled a high of $1.1324 intraday and a low of $1.1224.

On the economic front, employment in the U.S. private sector saw a notable increase in August, with ADP reporting private sector employment to have climbed by 190,000 jobs following a downwardly revised increase of 177,000 jobs in July. Economists expected employment to jump by about 210,000 jobs compared to the increase of 185,000 jobs originally reported for the previous month.

Labor productivity in the U.S. jumped much more than previously estimated in the second quarter, with an increase of 3.3 percent, reflecting a notable upward revision from the previously reported 1.3 percent growth. Economists expected the pace of growth to be upwardly revised to 2.8 percent.

Meanwhile, the Labor Department also said unit labor costs dropped by 1.4 percent in the second quarter compared to the previously reported 0.5 percent increase. Costs had been expected to be revised to show a drop of 1.2 percent.

Eurozone producer prices declined at a stable rate in July, in line with expectations, data from Eurostat showed Wednesday. The producer price index fell 2.1 percent year-over-year in July, the same rate of decrease as in the previous month, revised down from the 2.2 percent drop reported earlier.

British construction sector sustained its robust growth in August, albeit at a slower pace, with continued boost from the housing sector and new impetus from the commercial sector. The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers' Index rose to 57.3 from 57.1 in July, survey results from the Chartered Institute of Procurement and Supply and Markit Economics revealed Wednesday. Economists had forecast a higher score of 57.5.