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Crude oil futures edge lower on U.S. demand concerns

Published 09/15/2011, 04:30 AM
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Investing.com – Crude oil futures edged down on Thursday, falling to a two-day low as concerns over a slowdown in U.S. energy demand drove prices lower, while lingering concerns over the debt crisis in the euro zone also weighed.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at USD88.38 a barrel during European morning trade, falling 0.6%.    

It earlier fell as much as 0.8% to trade at USD88.02 a barrel, the lowest price since September 13.

Weekly data from the U.S. Energy Information Administration released Wednesday showed that U.S. crude oil inventories declined by 6.7 million barrels last week, more than doubling expectations for a 3.0 million barrel decline, as disruptions caused by Tropical Storm Lee weighed on oil production in the Gulf of Mexico.

However, total motor gasoline inventories increased by 1.9 million barrels, the largest buildup since June. Analysts had expected U.S. gasoline supplies to decline by 0.5 million barrels last week. 

The report added that total U.S. oil product demand over the past four weeks fell 0.9% from a year earlier, while gasoline use over the summer dropped 2.7% to an eight-year low, reflecting sluggish energy demand in the world’s largest oil consumer.

Meanwhile, concerns over the ongoing debt crisis in the euro zone also weighed, as investors eyed a Spanish debt auction later in the day and as speculation mounted over a possible downgrade of Italy’s sovereign debt rating.

Oil traders were also awaiting the release of a flurry of U.S. data to gauge the strength of the U.S. economic recovery and the need for further stimulus from the Federal Reserve.

Later in the day, the U.S. was to produce government reports on consumer price inflation, as well as the weekly report on initial jobless claims. The country was also to publish official data on manufacturing activity in New York and Philadelphia.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for November delivery added 0.34% to trade at USD109.67 a barrel, up USD21.29 a barrel on its U.S. counterpart.

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