Investing.com - Crude oil futures traded lower Wednesday despite a U.S. government report showed oil supplies fell unexpectedly last week.
Oil traders also remained fixated on concerns over Greece’s ongoing debt woes and the looming fiscal cliff crisis in the U.S.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD86.19 a barrel during U.S. morning trade, down 1.14% on the session
New York-traded oil prices fell by as much as 1.95% earlier in the day to hit a session low of USD85.38 a barrel, the weakest level since November 15.
Prices traded at USD85.52 a barrel prior to the release of the EIA data.
The U.S. EIA said in its weekly report that U.S. crude oil inventories declined by 0.34 million barrels in the week ended November 23, compared to expectations for an increase of 0.31 million barrels.
Total U.S. crude oil inventories stood at 374.1 million barrels as of last week.
Total motor gasoline inventories increased by 3.86 million barrels, compared to expectations for a gain of 0.86 million barrels.
Oil futures were down sharply ahead of the supply data as markets participants continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the five weeks left before the January 1 deadline.
Also Wednesday, official data showed that U.S. new home sales fell by 0.3% to a seasonally adjusted 368,000 units in October, confounding expectations for an increase to 390,000.
New home sales for September were revised down to 369,000 units from a previously reported 389,000.
The U.S. is the world’s biggest oil consuming country, responsible for almost 22% of global oil demand.
Doubts over the Greek debt deal also weighed on sentiment. Greece’s constitutional lenders reached an agreement Tuesday to reduce Greece’s debt-reduction target by EUR40 billion to 124% of gross domestic product by 2020.
But the lack of detail on how Greece will implement reforms needed to meet its new debt targets dented investor confidence.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery shed 0.7% to trade at USD109.12 a barrel, with the spread between the Brent and crude contracts standing at USD22.92 a barrel.