Oil fluctuates as risk-off mood vies with record inventory drop

Oil switched between gains and losses as bearish sentiment across financial markets countered a record decline in U.S. crude stockpiles.

West Texas Intermediate fell toward US$79 a barrel as a spike in Treasury yields and the dollar hurt equities and commodities. Crude also fell Wednesday, even as U.S. crude stockpiles, posted the biggest-ever draw in volume terms.

“Despite a sharp drawdown in inventories, crude fell on a broader risk-off tone,” said Charu Chanana, market strategist at Saxo Capital Markets Pte in Singapore. The focus was on macro concerns after Fitch's downgrade of the U.S. and Treasury funding, which pushed U.S. yields and the dollar higher, she said.