Crude Oil Ends Lower As Stockpiles Rise

(RTTNews) - U.S. crude oil pared much of the losses but still ended slightly lower on Wednesday, after the official weekly oil report from the Energy Information Administration showed crude stockpiles in the U.S. to have risen more than expected last week, for a ninth straight week.

Crude oil was also impacted by the dollar continuing to strengthen against a select band of currencies on expectations of a rate hike by the Federal Reserve soon. Hurting all dollar-denominated commodities, the dollar hit a fresh 12-year high against the euro touching $1.0512 intraday, its lowest in the last one year.

Oil prices also remain under pressure amid speculation that U.S. oil installations are running out of room for excess supplies.

Earlier today, a weekly report from the U.S. Energy Information Administration showed U.S. crude oil inventories to have surged 4.5 million barrels in the week ended March 6, while analysts expected an increase of 4.2 million barrels. The report showed U.S. crude oil inventories at 449.2 million barrels end last week, the most in over 80 years. Stockpiles have been climbing every week since the week ended January 9.

Gasoline stocks dropped by 0.2 million barrels last week, with analysts anticipating a decline of 1.7 million barrels. Inventories of distillate, including heating fuel, rose 2.5 million barrels, even as analysts estimated a drop of 2.3 million.

Late Tuesday, data from oil industry group, the American Petroleum Institute showed U.S. crude inventories to have dropped 0.40 million barrels for the week ended March 6.

Crude stocks rose by 2.2 million barrels at the Cushing, Oklahoma delivery point of the WTI contract, industry watcher API said Tuesday.

Meanwhile, Russia's oil minister says the nations crude oil exports will rise this year. A flood of oil from OPEC and non-OPEC nations alike has helped drive crude oil prices more than 50 percent lower compared to last summer.

Light Sweet Crude Oil futures for April delivery, the most actively traded contract, shed $0.12 or 0.2 percent to settle at $48.17 a barrel on the New York Mercantile Exchange Wednesday.

Crude prices for April delivery scaled a high of $49.05 a barrel intraday and a low of $47.33.

On Tuesday, crude oil plunged $1.71 or 3.4 percent to settle at $48.29 a barrel, as the dollar strengthened sharply and ahead of the weekly official oil inventory report.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 99.73 on Wednesday, up from its previous close of 98.67 on Tuesday in late North American trade. The dollar scaled a high of 99.99 intraday and a low of 98.49. The dollar scaled its highest in the last one year intraday.

The euro trended lower against the dollar at $1.0537 on Wednesday, as compared to its previous close of $1.0700 on Tuesday in late North American trade. The euro scaled a high of $1.0717 intraday and a low of $1.0537, the lowest in the last one year.

On the economic front, China's industrial production and retail sales growth slowed more-than-expected at the start of the year, reflecting moderation in growth momentum, data revealed Wednesday. Industrial production increased 6.8 percent year-on-year in the January to February period, the National Bureau of Statistics said. The annual growth was forecast to slow to 7.7 percent from 7.9 percent.

During January to February, China's retail sales grew at a pace of 10.7 percent, slower than an 11.9 percent rise seen in December and an expected increase of 11.6 percent.

U.K. industrial and manufacturing output declined unexpectedly in January, data from the Office for National Statistics revealed Wednesday. Industrial output slid 0.1 percent month-on-month in January, following a 0.2 percent drop in December. Economists had forecast a 0.2 percent rise for January.

European Central Bank President Mario Draghi said on Wednesday the stimulus measures adopted by the bank since January will stabilize inflation in line with the target and that they are working their way into the real economy.

"We can deploy - and we are deploying - monetary policy in a way that can - and will - stabilise inflation in line with our objective," Draghi said his speech at the ECB Watchers Conference in Frankfurt.