Oil prices fall 3 percent on stronger dollar, renewed glut worries
By Devika Krishna Kumar
NEW YORK (Reuters) - Oil prices slid more than 3 percent on Wednesday as the dollar jumped after the U.S. Federal Reserve's decision to hike U.S. interest rates and after a jump in crude inventories at the biggest U.S. storage center renewed concerns about a glut.
Crude tumbled to session lows after the Fed raised interest rates a quarter-point and signaled a faster pace of increases in 2017. The dollar rose, making oil more expensive for countries using other currencies.
Brent crude futures settled at $53.90 per barrel, down $1.82, or 3.27 percent after falling as low as $53.80. U.S. crude ended the session down $1.94, or 3.66 percent at $51.04 per barrel after hitting a low of $50.92.
Earlier, the U.S. Energy Information Administration reported that inventories at the Cushing, Oklahoma, hub rose for the sixth time in seven weeks.
Overall U.S. crude inventories fell 2.6 million barrels in the latest week, the data showed, much more than the decline of 1.6 million barrels analysts had forecast. [EIA/S]
Traders noted that most declines were in PADD 5, the West Coast, saying that did not truly reflect supply-demand fundamentals. Crude stocks in PADD 5 fell about 2.3 million barrels.
"This week really doesn't point to an effort to clear inventories from PADD3 (Gulf Coast) like many expected," said Troy Vincent, analyst at New York-based ClipperData.
"The decline in stocks is predominately from the West Coast, while Gulf Coast imports actually ticked higher and stocks only fell 400,000 bpd." Continued...