Crude oil prices declined sharply on Wednesday after data showed U.S. crude stockpiles rose for a third straight week and worries about a likely drop in global energy demand increased after disappointing manufacturing data from the U.S. and Europe.
West Texas Intermediate Crude oil futures for November ended down $0.98, or about 1.8%, at $52.64 a barrel.
On Tuesday, WTI crude oil futures ended down $0.45, or 0.8%, at $53.62 a barrel.
Data released by the Energy Information Administration (EIA) Wednesday morning showed oil inventories in the U.S. increased by 3.1 million barrels in the week ended September 27, nearly twice the expected jump.
The EIA report also said gasoline inventories for the week fell by about 230,000 barrels, much less than the expected drop. Meanwhile, distillate stockpiles dropped by about 2.4 million barrels, nearly 25% more than what was forecast.
A report released by the American Petroleum Institute late Tuesday showed U.S. crude stocks fell last week by 5.9 million barrels, contrary to expectations for an increase of 1.6 million barrels.
Gasoline stockpiles increased by 2.1 million barrels for the week ended Sept. 27, while distillate inventories fell by 1.7 million barrels.
Iran’s oil minister Bijan Zanganeh sought to defuse tensions with Saudi Arabia on Wednesday, calling his counterpart in Riyadh “a friend” and saying Tehran was committed to stability in the region. The minister made this comment while he spoke at a top Russian energy conference chaired by President Vladimir Putin.
Zanganeh met Saudi energy minister, Prince Abdulaziz bin Salman and OPEC’s Secretary General Mohammed Barkindo.
In economic news today, payroll processor ADP released a report showing private sector employment rose by slightly less than expected in the month of September.
ADP said private sector employment climbed by 135,000 jobs in September compared to economist estimates for an increase of about 140,000 jobs.
The report also showed a significant downward revision to the increase in private sector jobs in August, which was slashed to 157,000 jobs from the originally reported 195,000 jobs.
The material has been provided by InstaForex Company – www.instaforex.com