Crude oil futures drop to 5-week low after U.S. EIA inventory data

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Forexpros - Crude oil futures extended losses on Wednesday, dropping to five-week low after a government report showed that U.S. crude oil and gasoline inventories increased last week, underlining concerns over a slowdown in demand from the world's largest oil consumer.

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD92.15 a barrel during U.S. morning trade, tumbling 1.15%.

It earlier fell as much as 1.6% to trade at USD91.77 a barrel, the lowest price since June 28.

The contract traded at USD92.50 prior to the release of the Energy Information Administration data.

The U.S. EIA said in its weekly report that U.S. crude oil inventories rose by 1.0 million barrels in the week ended July 29, slightly below expectations for a 1.5 million barrel increase.

U.S. crude supplies rose for the second consecutive week, after climbing by 2.3 million barrels in the preceding week.

Total U.S. crude oil inventories stood at 355.0 million barrels as of last week, remaining above the upper limit of the average range for this time of year.

Total motor gasoline inventories increased by 1.7 million barrels, significantly higher than expectations for a 0.5 million barrel increase.

Energy traders have been closely eyeing gasoline stockpiles in recent weeks to gauge the strength of demand as the U.S. driving season was in its peak gasoline demand period.

Meanwhile, the outlook for U.S. economic growth remained downbeat after the U.S. Institute of Supply Management said earlier that its non-manufacturing purchasing manager's index fell to 52.7 in July, confounding expectations for a gain to 53.8.

A separate report showed that U.S. factory orders fell by a seasonally adjusted 0.8% in June, above expectations for a 0.5% decline.

Also Wednesday, payroll processing firm ADP said that U.S. non-farm private employment rose by 114K in July, outstripping expectations for a gain of 100K.

However, the previous month's figure was revised down to a gain of 145K from a previously reported 157K.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery sank 1.7% to trade at USD114.11 a barrel, up USD21.96 on its U.S. counterpart.

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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.

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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