Crude Oil Ends Lower As Greek Proposals Rejected

(RTTNews) - U.S. crude oil snapped a two-day gain to end lower on Wednesday, as market sentiments were hit after Greek officials said creditors have rejected a debt reform proposal that would have saved Athens from default. The drop comes despite an eighth straight week of decline in official crude oil inventories and the dollar trending lower.

Earlier today, a weekly report from the U.S. Energy Information Administration said U.S. crude oil inventories dropped 4.9 million barrels in the week ended June 19, while analysts expected stocks to decline 2.3 million barrels. The report showed total U.S. crude oil inventories at 463.0 million barrels end last week. This is the eighth straight week crude oil inventories have declined.

Nevertheless, EIA said oil production in the U.S. rose to 9.60 million barrels a day, from 9.59 million barrels a week earlier.

Stocks at Cushing, Oklahoma, the key delivery point for Nymex crude, dropped 1.9 million barrels last week, while it was estimated to drop 700,000 barrels.

Gasoline stocks increased 0.7 million barrels last week, while inventories of distillate, including heating fuel, rose 1.8 million barrels last week.

Data from the oil and gas industry trade group American Petroleum Institute late Tuesday showed U.S. crude oil stocks to have plunged 3.2 million barrels last week.

The troika of creditors rejected reform proposals submitted by Greece earlier this week and has reportedly presented Greece with a set of counter proposals. The creditors include the International Monetary Fund, the European Commission, and the European Central Bank.

A Bloomberg report, citing a Greek government official, said creditors insisted Athens drop measures including planned extra charge on company profits, taxing electronic gaming and an hike in employer contributions to pensions.

Greek Prime Minister Alexis Tsipras in a tweet said international creditors are rejecting equivalent measures that were accepted for Portugal and Ireland.

Greece is faced with a 1.5 billion euro payment to the IMF at the end of month. The country has indicated that it will not be able to make the payment without further aid.

Light Sweet Crude Oil futures for August delivery, the most actively traded contract, fell $0.74 or 1.2 percent, to settle at $60.27 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for August delivery scaled a high of $61.57 a barrel intraday and a low of $59.80.

On Tuesday, crude oil for August delivery gained $0.63 or 1.0 percent, to settle at $61.01 a barrel, with traders taking positions ahead of the weekly oil report from the U.S. Energy Information Administration and the American Petroleum Institute.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.27 on Wednesday, down from its previous close of 95.40 on Tuesday in late North American trade. The dollar scaled a high of 95.54 intraday and a low of 94.93.

The euro trended higher against the dollar at $1.1208 on Wednesday, as compared to its previous close of $1.1168 in North American trade late Tuesday. The euro scaled a high of $1.1236 intraday and a low of $1.1158.

On the economic front, German business confidence weakened to a four-month low in June as Greece crisis weighed on the current situation assessment and expectations of companies, results of a survey by the Munich-based Ifo Institute showed Wednesday. The business confidence index fell to a four-month low of 107.4 in June from 108.5 in May. It was expected to ease to 108.1.

The French economy expanded as initially estimated in the first quarter, final data from the statistical office Insee showed Wednesday. Gross domestic product grew 0.6 percent sequentially in the first quarter after expanding 0.1 percent in the fourth quarter. The statistical office confirmed the preliminary estimate for the first quarter. This was the fastest growth since the second quarter of 2013.

U.K. mortgage approvals increased to a 14-month high in May, the British Bankers' Association said Wednesday. The number of mortgage approvals rose to 42,530 in May from 42,020 in April. This was the highest level since March 2014, when it totaled 45,318. It was forecast to rise to 43,350.

A leading index for the Chinese economy spiked in May, a survey from the Conference Board showed Wednesday. The index rose 1.1 percent, which follows the upwardly revised 1.4 percent jump in April (originally 1.1 percent) and the 0.2 percent increase in March.