Crude oil futures tumble on US supply concerns

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Crude oil futures slumped in the domestic market on Wednesday as investors and speculators exited positions in the energy commodity after a report said that US crude oil stockpiles rose more than expected last week, signaling weakening demand for the fuel in the world's biggest crude oil consuming nation.

US crude oil stockpiles rose 6.18 million barrels to 370 million barrels last week, the EIA said. Refineries in the US operated at 86 per cent capacity last week, down 1.4 percentage point from the previous week, and the least since October.

The US government announced a test sale of strategic petroleum reserve oil as the Obama administration said that it plans to offer 5 million barrels from emergency supplies in a bid to test the country's oil-distribution system, adding pressure on supplies.

Industrial output in the Euro area unexpectedly fell in January 2014, signaling doubts over the recovery in the 18-member economy, dimming the demand outlook for the fuel. Euro area industrial output fell 0.2 per cent in January 2014 over the previous month.

Crude oil futures may fall today with data tipped to show a slowdown in Chinese industrial output growth last month, diming the demand outlook for the fuel in the world's second biggest economy.

At the MCX, Crude Oil futures, for the March 2014 contract closed at Rs 5,983 per barrel, down by 2.46 per cent, after opening at Rs 6,120, against a previous close of Rs 6,134. It touched an intra-day low of Rs 5,965.

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Story first published: Thursday, March 13, 2014, 12:40 [IST]
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