Crude oil futures fell sharply Wednesday, extending a recent slump after data showed U.S. oil inventories dropped for a second week in a row. March WTI oil settled at $61.79/bbl, down $1.60, or 2.5% -- the lowest in a month. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.9 million barrels from the previous week. Total motor gasoline inventories increased by 3.4 million barrels last week, and are in the middle of the average range. A stronger dollar and demand concerns also weighed on oil prices. Rising interest rates may cool off the economy, resulting in diminished demand for energy products.
Crude oil futures continued to fall Wednesday morning despite a report showing a surprising drawdown in U.S. inventories. The American Petroleum Institute (API) reported a draw of 1.050 million barrels of United States crude oil inventories for the week ending January 30, according to the API data. Analysts had expected a build of 3 million barrels in crude oil inventories. The Energy Information Administrations releases the government's data later this morning. WTI light sweet oil was down 20 cents at $63.10 a barrel, having tumbled from a 4-year high near $66 over the past week.
Oil has been hurt by a stronger dollar and demand concerns in the wake of big losses for U.S. stocks. Venezuela President Nicolas Maduro has called on his OPEC counterparts to join him for the creation of a common cryptocurrency mechanism for the oil cartel. Addressing the media after meeting with Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Tuesday, Maduro said he will officially propose to the OPEC and non-OPEC countries that they work out a joint cryptocurrency mechanism backed by oil.
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