Oil futures pared losses Wednesday, after U.S. government data showed an unexpected decline in last week’s crude supplies, but prices still looked to extend their losing streak to a third-straight session on fiscal-cliff and Greek-debt woes.
Crude-oil futures for January delivery fell 84 cents, or 1%, to $86.34 U.S. a barrel on the New York Mercantile Exchange. Earlier, they touched a low of $85.36.
Oil prices tallied a fall of 1.2% over the past two trading sessions, with Tuesday’s weakness attributed to renewed worries about a global recession and concerns about demand for the commodity.
On Tuesday, the Organization for Economic Cooperation and Development warned about the prospects for a global recession.
Traders also digested the latest government update on U.S. petroleum supplies.
Crude supplies fell by 300,000 barrels for the week ended Nov. 23, the Energy Information Administration reported Wednesday. Analysts polled by Platts expected a 500,000-barrel increase.
Motor gasoline supplies jumped by 3.9 million barrels, while distillate stocks fell by 800,000 barrels, the EIA report said. Analysts had forecast a rise of 1 million barrels for gasoline inventories and a fall of 150,000 barrels in distillate supplies.
The American Petroleum Institute reported late Tuesday that crude supplies rose 2 million barrels last week.
At last check, heating oil for December delivery was down nearly two cents, or 0.5%, at $2.99 U.S. a gallon, and gasoline for delivery in the same month fell three cents, or 1%, to $2.70 U.S. a gallon.
The fiscal cliff refers to the $600 billion U.S. of tax increases and spending cuts that will kick in from January unless U.S. politicians reach an agreement to avert the event. The cliff may push the U.S. economy into a recession.
Strength in the U.S. dollar added pressure to dollar-denominated commodities, contributing to a broad selloff in energy and metals markets.
The ICE dollar index , which measures the greenback against a basket of six rival currencies, rose to 80.436 from 80.344 in late North America trading on Tuesday. See: Dollar drifts higher amid fiscal-cliff concerns.
Rounding out action in energy futures Wednesday, natural-gas prices took a hit ahead of the December contract expiration at the close of Nymex trading.
Natural-gas futures for December delivery sank 12 cents, or 3.1%, to $3.65 U.S. per million British thermal units.
