FX.co ★ Oil Futures Settle Notably Lower After Official Inventory Data

Crude oil prices fell on Wednesday, weighed down by data showing a much smaller than expected drop in U.S. crude inventories in the week ended July 21st.

Some profit taking after recent strong gains that had lifted oil prices to three-month highs, weighed as well on oil prices.

Uncertainty about the outlook for demand from China, and the Federal Reserve's decision to raise rates by 25 basis points also hurt oil prices.

West Texas Intermediate Crude oil futures for September ended lower by $0.85 or about 1.1% at $78.78 a barrel.

Brent crude futures settled lower by $0.72 or about 0.9% at $82.92 a barrel today.

Data released by the Energy Information Administration (EIA) this morning showed crude inventories in the U.S. dropped by 600,000 barrels last week, substantially less than an expected draw of 2.35 million barrels.

The EIA data also showed that gasoline stockpiles dropped 0.786 million barrels last week, as against an expected decline of 1.678 million barrels, while distillate stockpiles dropped 0.245 million barrels, less than an expected decline of 0.301 million barrels.

Data from the American Petroleum Institute Tuesday evening showed U.S. crude stocks rose by about 1.3 million barrels in the week that ended on July 21, denting optimism about the world's economic recovery.