Loonie down: crude tumbles amid surge in U.S. gasoline inventories

TORONTO – The Canadian dollar closed lower Thursday as oversupply concerns sent crude oil prices below US$75 for the first time in four years.

The loonie slipped 0.47 of a cent to 87.9 cents US.

The December crude oil contract on the New York Mercantile Exchange fell $2.97 to US$74.21 a barrel.

The latest drop came amid a larger-than-expected decline in crude inventories but a surprise increase in supplies of gasoline, one of the key refined products made from oil.

The Energy Information Administration said U.S. oil supplies decreased 1.7 million barrels last week, much larger than the 500,000-barrel drop that analysts had expected.

However, gasoline inventories rose by 1.8 million barrels against an expected 280,000 decrease.

Meanwhile, OPEC said October crude production fell by 226,400 barrels a day to 30.25 million barrels, reflecting a drop in Saudi output to 9.6 million barrels a day.

However, analysts believe this output is still significantly above the level needed to balance the market and further action will be needed at the cartel’s meeting later this month.

Elsewhere on commodity markets, the December gold bullion contract in New York rose $2.40 to US$1,161.50 an ounce while December copper declined three cents to US$2.99 a pound.

Statistics Canada is expected to release its September manufacturing survey on Friday.

And the U.S. consumer will also be in focus Friday as retail sales data for October is released, along with the University of Michigan’s consumer confidence survey.