NEW YORK, Dec. 5 (Xinhua) -- Crude prices fell on Wednesday as the U.S. dollar strengthened and U.S. gasoline and distillates inventories increased sharply last week.
The dollar rose against the euro as data from the euro zone pointed to a weak economy in the bloc.
According to Markit, the PMI for the 17-nation euro zone in November was 46.5, rising from the 40-month low of 45.7 in October but indicating a deep contraction in private-sector output. Meanwhile, the euro zone's retail sales fell 1.2 percent in October from September, the biggest drop since April, the Eurostat said on Wednesday.
The economic contraction in the euro zone also pressured the crude demand outlook, pushing down oil prices.
Domestically, U.S. payrolls processing firm ADP estimated that the private sector added 118,000 jobs in November, much smaller than the number in October as Hurricane Sandy hurt employment.
The Energy Information Administration reported U.S. crude inventories fell 2.4 million barrels in the week ended Nov. 30 as demand from refineries rose. Refineries were operating at 90.6 percent of capacity, the strongest rate since August.
But the markets were overshadowed by the sharp increase of gasoline stocks. According to the EIA report, gasoline inventories jumped 7.9 million barrels in the week, far beyond market estimates. Meanwhile, distillate inventories rose 3.0 million barrels, adding to the inventories pressure.
Moreover, lingering concerns about the fiscal cliff weighed. President Barack Obama rejected a Republican plan that proposed to extend the fiscal cliff talks into next year, stressing the need to reach a deal before year end.
But crude prices still got support from the continuing unrest in the Middle East.
Light, sweet crude for January delivery lost 62 cents, or 0.70 percent, to settle at 87.88 dollars a barrel on the New York Mercantile Exchange.
Brent crude for January delivery slipped 1.03 dollars, or 0.94 percent, to finish at 108.81 dollars a barrel.
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