Crude oil prices came under further pressure today, following bearish EIA weekly oil inventories report. The weekly EIA report showed crude oil inventories surged unexpectedly by 5.0 million barrels for the week ending 8th October 2014. Gasoline stocks increased largely by 1.18 million barrels against analysts’ estimates of 660,000 barrels decline, while distillate stocks increased by 439,000 barrels versus expectations of 1.1 million barrels drop.
Brent front month futures plunged sharply more than 1.3% heading towards the key support area of $90 per barrel, while WTI front month futures retreated sharply to retest $87 per barrel.
It was another volatile trading session for the European equity markets, which experienced another round of sell-off posting heavy losses following the recent disappointing economic data. The CAC, DAX, AEX and IBEX retreated between 0.7% and 1.05%, while the London equity benchmark managed to hold around 6,470. Investors remain cautious ahead of the FOMC meeting, which could provide insight about the current US economic conditions and expectations.
On the macroeconomic front, UK BRC retail sales fell sharply by 1.8% in September compared to a -1.6% decline in August, adding further pressure to sterling, which tested 1.6050.