The biggest decline in U.S. crude oil futures in almost a month occurred on Wednesday as record-low crude stocks could not counter risk-off investor mood brought on by Fitch’s downgrading of the U.S. credit rating to AA+ from AAA.

As the Treasury Department revealed intentions to raise supply, Treasury yields increased substantially. climbing debt yields in turn strengthened the currency, with the U.S. currency Index climbing 0.3%.

Both the front-month Nymex crude COM for September delivery and the October Brent crude COM finished with their worst one-day percentage drops since June 27. They both closed at $79.49/bbl and $83.20/bbl, respectively.

Additionally, U.S. front-month natural gas COM, which had declined by 3.2% to $2.477/MMBtu, experienced its worst decline since June 27.

According to data going back to 1982, the Energy Information Administration said that U.S. oil inventories dropped by 17M barrels last week, the greatest weekly decline ever.

The fact that U.S. inventories have dropped to their lowest level since January should please oil bulls who had been anticipating tighter balances, but Kpler oil analyst Matt Smith was unimpressed by the robust crude exports of 5.3M bbl/day and high refinery runs that caused the significant decline.

Peak summer refining activity has coincided with very strong end-of-month exports, and Smith said withdrawals of this scale should not be anticipated going forward.

Already having reported a 15.4M-barrel decrease in U.S. oil stockpiles, the American Petroleum Institute, according to Smith, created “a case of buying the rumour and selling the fact for WTI.”

Prices were further lowered by the U.S. government withdrawing its offer to purchase 6 million barrels of oil for the Strategic Petroleum Reserve.

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