Oil futures struggled for direction early Wednesday as investors awaited data on U.S. inventories, after industry data showed a large drop in crude supplies late Tuesday, while the Federal Reserve is due to announce its latest decision on interest rates later in the session.
Price action
- West Texas Intermediate crude for December delivery CL00, +0.84% CL.1, +0.84% CLZ22, +0.84% was flat at $88.37 a barrel on the New York Mercantile Exchange.
- January Brent crude BRN00, +0.78% BRNF23, +0.78%, the global benchmark was up 1 cent at $94.66 a barrel on ICE Futures Europe.
- Back on Nymex, December gasoline RBZ22, +2.55% rose 0.3% to $2.603 a gallon, while December heating oil HOZ22, +0.17% fell 0.1% to $3.618 a gallon.
- December natural gas NGZ22, +7.77% rose 3.5% to $5.912 per million British thermal units.
Market drivers
The American Petroleum Institute, an industry trade group, late Tuesday said U.S. crude inventories fell 6.5 million barrels last week, news reports said, while gasoline stocks were seen down 2.6 million barrels and distillate stocks rose 865,000 barrels.
More closely followed data from the U.S. Energy Information Administration is due Wednesday morning. Analysts surveyed by S&P Global Commodity Insights, on average, expect crude supplies to fall 1.6 million barrels, with gasoline stocks seen down by 1.9 million barrels and distillate inventories off by 1 million barrels.
Investors were also awaiting the outcome of a Federal Reserve policy meeting that’s expected to deliver another supersize 75 basis point, or 0.75 percentage point, increase in the benchmark interest rate. The focus is on Fed Chair Jerome Powell’s comments though amid expectations he will signal that smaller rate rises are ahead.
Oil has been pressured on worries the Fed’s aggressive interest rate increases — and monetary tightening by other major central banks — will tip the global economy into a sharp slowdown, curtailing demand for crude.
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