Crude oil prices declined sharply on Wednesday as a downward revision in oil demand forecast by OPEC and speculation that the U.S. may ease sanctions on Iran outweighed data showing a larger than expected drop in U.S. crude stockpiles last week.
West Texas Intermediate Crude oil futures for October ended down $1.65, or about 2.9%, at $55.75 a barrel, the lowest settlement since September 3.
On Tuesday, WTI Crude oil futures for October ended down $0.45, or about 0.8%, at $57.40 a barrel.
According to the data released by the Energy Information Administration (EIA) today, crude stockpiles in the U.S. declined nearly 7 million barrels last week, much more than an expected draw of 2.7 million barrels.
The EIA report also said gasoline inventories were down by 0.68 million barrels last week, while distillate stockpiles rose 2.7 million barrels, much higher than an expected 0.07 million barrels.
The American Petroleum Institute (API), which released its crude oil inventory report late Tuesday, has estimated a large crude oil inventory draw of 7.2 million barrels for the week ending September 5.
The OPEC's monthly report says demand for its crude will drop by about 1.2 million barrels per day, to 29.4 million barrels per day in 2020.