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Crude oil futures decline in Asian trade

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Forexpros - Crude oil futures weakened in early Asian trade Wednesday, as U.S. inventories showed steep drops, spelling possible decreased demand from the world's largest energy consumer.

On the New York Mercantile Exchange light, sweet crude futures for September delivery traded at USD81.33 a barrel during early Asian trade, falling 0.43%, after hitting a daily high of USD82.14.

On Wednesday the Energy Information Administration reported that U.S. crude supplies declined by 5.2 million barrels last week, the sharpest decline since June. Gasoline stockpiles decreased by 1.6 million barrels, according to the EIA.

Market expectations were for an increase in crude supplies of 1.5 million barrels and for gasoline reserves to rise by 0.9 million barrels.

Supplies dropped as Tropical Storm Don struck the Gulf of Mexico last week, causing disruptions in production for the region, home to 29% of U.S. production.

Also Wednesday, the International Energy Agency warned that oil demand growth could drop by more than half if the global economy expands more slowly than expected in 2012.

Oil prices are down USD13 a barrel since the beginning of August.

Sagging oil prices were underscored by a strengthening U.S. dollar. Dollar-denominated oil futures contracts tend to fall when the dollar rises, as oil becomes more expensive for purchasers in other currencies.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, rose 013% to 74.94.

On the ICE Futures Exchange Brent oil futures for September delivery rose 0.04% to trade at USD105.47.

Markets were expected to focus on jobless numbers due out Thursday from the U.S. Department of Labor.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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