Crude oil prices slumped on Wednesday, with West Texas Intermediate falling below $50 a barrel for the first time in more than three months after the Energy Information Administration reported an unexpected rise in US crude stockpiles. Meanwhile, global stock prices declined after technology giants Apple and Microsoft reported disappointing earnings.
The price of US crude fell 3.3 percent or $1.67 to $49.19 a barrel on the New York Mercantile Exchange. According to The Wall Street Journal, that was the lowest settlement since April 2.
Brent, the international crude benchmark, fell 1.6 percent or 91 cents to $56.13 on ICE Futures Europe.
Crude prices, already reeling from the recently announced Iran nuclear deal, were under added pressure on Wednesday after the Energy Information Administration (EIA) said US commercial crude inventories rose by 2.5 million to 463.9 million barrels last week. Analysts had expected a decline of up to 2.3 million.
The unexpected rise in inventories heightened concerns that the global oversupply of oil was worsening. US crude output has remained steady despite falling rig counts this year. Output remains elevated in Saudi Arabia and is expected to pick up in Iran following the expected sanctions relief. Binary Options Traders can expect much more volatility in the global energy markets in the coming months.
The US dollar strengthened against world currencies on Wednesday and climbed to nearly 11-year highs against its northern rival, the Canadian dollar. The USD/CAD exchange rate rose to an intraday high of 1.3051, its highest since September 2004.
The US dollar index climbed to a daily high of 97.75 on Wednesday. Imperial Options Traders can expect continued strength for the world’s most actively traded currency as the US Federal Reserve begins to increase interest rates later this year.
In economic data, US existing home sales rose 3.2 percent to a seasonally adjusted 5.49 million in June, the National Association of Realtors reported. That was well above forecasts calling for 1.2 percent and the highest rate in nearly six years.
Global stock markets were also under pressure on Wednesday after Apple Inc. (NASDAQ: APPL) fell short of lofty earnings expectations. Reporting after the bell on Tuesday, the iPhone maker posted better than expected earnings and revenue, but didn’t include information on Apple Watch sales, signaling to investors that the new gadget hasn’t been a game changer. Apple’s revenue forecast for the current quarter also came in below expectations.
Apple shares (NASDAQ:AAPL) fell by as much as 7 percent in after-hour trading on Tuesday. Shares were down 4.3 percent by end of day Wednesday. Shares of Microsoft (NASDAQ:MSFT) fell 3.7 percent after the software maker reported a quarterly loss of $3.2 billion.
Most of Europe’s benchmark stock indices ended lower on Wednesday, with the FTSE 100 in London falling 101.73 points or 1.5 percent to 6,667.34. The Euro Stoxx 50 closed at 3,635.58, down 12.38 points or 0.3 percent.
In US trading, the Dow Jones Industrial Average fell 68.25 points or 0.4 percent to 17,851.04. The S&P 500 Index fell 5.06 points or 0.2 percent to 2,114.15. The NASDAQ Composite Index fell 36.35 points or 0.7 percent to 5,171.77.