U. S. crude futures extended declines towards $68 a barrel and settled at $68.67, a 0.8 percent fall from a day earlier, under pressure from a stronger dollar and government data showing a much larger-than-expected build in U. S. crude product stocks. The fall in crude oil was proportionately lower on MCX as it declined by only 0.18 percent. Natural Gas declined by 2.86 percent on MCX on the concerns of a further inventory build.

U. S. gasoline inventories rose steeply last week and distillate stocks hit 10-year highs as refiners hiked output, according to data from the U. S. Energy Information Administration released on Wednesday. Crude stockpiles fell by 3.8 million barrels in the week to June 19, after analysts polled by Reuters had forecast a draw of 1 million barrels.

Nigeria's president will propose a 60-day amnesty programme for militants in the Niger Delta on Thursday, in an effort to end years of attacks on Africa's biggest oil and gas industry, a senior official said. The government estimates as many as 20,000 militants could participate in the programme, but sceptics question whether an amnesty alone will be enough to halt widespread oil theft, pipeline bombings and kidnappings for ransom.

Yesterday built in gasoline and distillate stocks triggered a downside in crude oil. Dollar which remained weak for quite some time also strengthened during the day and pressurized the prices. We may see crude oil prices trading sideways to down during the day.