Oil fell to six-week lows in recent trading activity, as fresh concerns about the Eurozone added to the economic gloom that knocked as much as 9 percent off prices.
Oil financial spread trading markets were gripped by external economic factors last week, tumbling after weak Chinese industrial data and a bleak economic outlook from the US Federal Reserve sent traders into safer havens, triggering the biggest commodity sell-off since May.
US crude fell $8.11, or 9.2 percent. Oil prices have also been affected by the prospect of a faster-than-expected restart of Libyan production that could add to supply of high-quality oil, especially to Europe where supply had been tightened by the war in Libya and outages in the North Sea and Nigeria. Note that you can speculate on crude oil prices with IG Index.
Also moving the commodity spread trading market was the fact that Government data showed US crude inventories dropped 7.3 million barrels, the biggest one-week drop since December, suggesting supplies were tighter than expected. US crude oil stocks posted their biggest weekly drop in more than nine months as imports fell and refiners ramped up utilisation rates, boosting gasoline stockpiles.
Domestic crude inventories fell 7.34 million to 339.05 million barrels, the lowest level since January, the US Energy Information Administration stated. In addition, the EIA blamed the lingering impact of Tropical Storm Lee, which shut in large volumes of production earlier in the month for the steep drop.
Distillates, which include heating oil and diesel, fell 874,000 barrels to 157.61 million barrels. Analysts had projected a build of 1 million barrels. The higher runs plus weak demand helped increase gasoline inventories 3.3 million barrels to 214.08 million barrels, compared with expectations for a 1.2-million-barrel rise.
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