Crude oil futures plunged by over 3 per cent in the domestic market on Wednesday as investors and speculators exited positions in the energy commodity tracking a trend in the overseas market as a sixth straight rise in US crude stockpiles exasperated fears over a global supply glut.
US crude oil supplies climbed by 2.8 million barrels to 482.8 million barrels in the week ended October 30, 2015, remaining near the highest level in at least 80 years, the EIA said.
However, stockpiles at Cushing, the biggest US oil storage hub fell by 212,000 barrels last week. Meanwhile, US crude oil output climbed by 48,000 barrels per day to 9.16 million barrels per day last week while refinery utilization was at 88.7 per cent, up slightly from 87.6 per cent in the prior week.
Investors cast aside robust US economic data which showed strong private jobs growth in October while services expanded at the second fastest pace in a decade and the trade gap shrank to a seven-month low in September, signaling a pickup in the world’s biggest economy, boding well for oil’s demand prospects.
Private payrolls in the US climbed 182,000 in October, following a revised 190,000 in September, while the ISM services gauge accelerated to 59.1 in October from 56.9 in September, with a reading above 50 signaling expansion. US trade gap narrowed to USD 40.8 billion in September from USD 48 billion in August on lower oil imports.
Oil may rebound today as a strengthening US economic recovery bolsters demand outlook for the fuel in the world’s biggest oil consumer.
At the MCX, Crude oil futures, for the November 2015 contract, closed at Rs 3,049 per barrel, down by 3.45 per cent, after opening at Rs 3,145, against the previous close price of Rs 3,158. It touched an intraday low of Rs 3,041.
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