Crude oil futures prices down july 25, 2012

Crude oil futures prices down july 25, 2012 : Crude oil futures turned lower in choppy trade during U.S. morning trade on Wednesday, falling 1% to hit a seven-day low after a U.S. government report showed both oil and gasoline supplies increased unexpectedly last week.

On the New York Mercantile Exchange, light sweet crude futures for delivery in September traded at USD87.52 a barrel during U.S. morning trade, dropping 1.1%.

Earlier in the day, prices fell by as much as 1.25% to trade at USD87.26 a barrel, the lowest since July 16.

The U.S. EIA said in its weekly report that U.S. crude oil inventories increased by 2.7 million barrels in the week ended July 20, defying expectations for a decline of 0.65 million barrels. U.S. crude supplies fell by 0.8 million barrels in the preceding week.

Total U.S. crude oil inventories stood at 380.1 million barrels as of last week.

Total motor gasoline inventories rose by 4.1 million barrels, compared to expectations for a decline of 0.63 million barrels, after falling by 1.8 million barrels in the preceding week.

Meanwhile, concerns over the U.S. economic outlook intensified after official data showed that U.S. new home sales fell more-than-expected in June, dropping 8.4% to a seasonally adjusted 350,000 unit annual rate, compared to expectations for a decline of 2.6% to 372,000.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Oil prices were mildly higher ahead of the data as market sentiment found mild support after European Central Bank Governing Council member Ewald Nowotny said that there were some arguments in favor of giving the European Stability Mechanism a banking license, which would increase its firepower to fight the debt crisis in the euro zone.

Markets have been hit by fears that the ESM would not be sufficiently large enough to cope in the event that Spain will require a full-scale sovereign bailout, in addition to the rescue package already agreed for its bank’s.

The euro bounced off the lowest level since June 2010 against the U.S. dollar, while the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.3% to trade at 83.82.

Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for September delivery declined 0.45% to trade at USD102.97 a barrel, with the spread between the Brent and crude contracts standing at USD15.45.

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