Crude-oil futures settled sharply lower Thursday, erasing a surge higher that followed the Swiss National Bank’s decision to scrap a cap on its currency, as the U.S. dollar regained its footing and investors focused on OPEC’s downgraded forecast of demand for its crude. West Texas Intermediate crude oil for February delivery fell $2.23, or 4.6%, to settle at $46.25 a barrel after trading as high as $51.27. Oil saw its biggest one-day jump since 2012 on Wednesday, in a move tied in part to options expiration activity, but it gave back most of that gain Thursday and remains near six-year lows.
OPEC, in its monthly report, said it expects demand for oil from the cartel will average 28.8 million barrels a day in 2015, around 100,000 barrels a day less than the organization’s previous forecast and down 300,000 barrels from the level seen in 2014. Overall, global oil demand is expected to rise slightly in the wake of a plunge in oil prices.
In a surprise announcement Thursday morning, Swiss National Bank President Thomas Jordan said the Swiss bank would eliminate its minimum exchange rate of 1.20 francs to the euro. The cap was introduced four years ago to shield Switzerland from the European debt crisis and to prevent the Swiss franc from becoming too strong.