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MTECHTIPS:-WTI oil futures fall below $39 after weekly U.S. supply data

MTECHTIPS:-WTI oil futures fall below $39 after weekly U.S. supply data

West Texas Intermediate oil futures added to losses on Wednesday, after data showed that oil product supplies in the U.S. rose sharply last week, underlining concerns over weak demand. Crude oil for delivery in October on the New York Mercantile Exchange shed 53 cents, or 1.35%, to trade at $38.78 a barrel during U.S. morning hours. Prices were at around $39.29 prior to the release of the inventory data. The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 5.5 million barrels in the week ended August 21. Market analysts’ expected a crude-stock rise of 1.1 million, while the American Petroleum Institute late Tuesday reported a decline of 7.3 million barrels. Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, increased by 256,000 barrels last week, following a rise of 326,000 barrels in the preceding week. Total U.S. crude oil inventories stood at 450.8 million barrels as of last week, remaining near levels not seen for this time of year in at least the last 80 years. The report also showed that gasoline inventories increased by 1.7 million barrels, stockpiles rose by 1.4 million barrels. New York-traded oil futures tumbled to $37.75 on Monday, a level not seen since February 2009, as worries over high domestic U.S. oil production weighed. According to industry research group Baker Hughes (NYSE: BHI), the number of rigs drilling for oil in the U.S. increased by two last week to 674, the fifth straight weekly gain. The rig count dropped for 29 straight weeks before rebounding modestly in recent weeks. Elsewhere, on the ICE Futures Exchange in London, Brent oil for October delivery dipped 29 cents, or 0.66%, to trade at $42.92 a barrel. London-traded Brent futures sank to $42.23 on Monday, the lowest level since March 2009.

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