Larger-than-expected decline in U.S. crude inventories for last week fail to control the drop
Crude prices plunged at Nymex on Thursday, 13 November 2014. Saudi Arabia's oil minister left oil markets confused about what direction, if any, the kingdom and OPEC will take to stop oil prices' free fall, and oil futures traded at fresh multiyear lows on Thursday. The decline was so pronounced that a surprise larger-than-expected decline in U.S. crude inventories didn't move the needle, and New York-traded oil futures settled at their lowest since September 2010.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December fell $2.97, or 3.9%, to $74.21 a barrel. Futures had settled Wednesday at a three-year low.
OPEC reported Wednesday a slight decline in production from its member countries, but that drop was matched by increases in production elsewhere. Traders have been debating whether OPEC will announce a cut in production when it meets on 27 November in Vienna, boosting futures prices.
Earlier Thursday, the Energy Information Administration said U.S. oil supplies decreased 1.7 million barrels in the week ended 7 November 2014. Market had expected a decline of 500,000 barrels. Gasoline inventories rose by 1.8 million, and supplies of distillates decreased by 2.8 million barrels. Market had expected gasoline supplies to decrease 280,000 barrels and distillates stockpiles to decrease 1.6 million barrels. The report was a day late due to the Veterans Day holiday.
China industrial production in October was reported at up 7.7% year-on-year, which is below the 8% rise that was expected. This latest economic data falls in line with Chinese economic reports that have mostly missed to the downside of expectations. While China's economic readings are still the envy of major industrial countries, the robust growth seen in recent years is decelerating.
A European Central Bank survey showed that forecasters see this year's European Union overall inflation rate at 0.5% and see 2015 inflation coming in at 1.0%. They see EU inflation in 2016 at 1.4%. All these figures are still well below the 2.0% inflation rate the ECB has targeted.
At Wall Street today, economic data included Initial Claims, JOLTs, and the Treasury Budget. The initial claims level increased to 290,000 from an unrevised 278,000 while the consensus expected an increase to 280,000. The Department of Labor said there were no special factors influencing the report .
The Job Openings and Labor Turnover Survey for September indicated job opening decreased to 4.735 million from 4.853 million. Separately, the Treasury Budget for October showed a deficit of $121.70 billion, which followed the prior deficit of $90.60 billion while the consensus expected the deficit to hit $122.00 billion.
Among other energy proucts, gasoline for December fell 10 cents, or 5%, to $2.0016 a gallon on Nymex, its lowest settlement in four years. December heating oil declined 8 cents, or 3.5%, to $2.3621 a gallon also on Nymex, also its lowest since September 2010.
December natural gas declined 21 cents, or 5%, to finish at $3.9770 per million British thermal units. Futures extended their losing streak, now the longest since late October, to a fourth straight session.
