MW Oil futures trim losses after fall in U.S. crude inventories, Fed rate cut
By William Watts
Oil futures ended slightly lower Wednesday, trimming losses after government data showed U.S. crude inventories fell last week and the Federal Reserve delivered a rate cut of 50 basis points, or half a percentage point.
Price moves
West Texas Intermediate crude for October delivery CL.1 CLV24 lost 28 cents, or 0.4%, to finish at $70.91 a barrel on the New York Mercantile Exchange.November Brent crude BRN00 BRNX24, the global benchmark, settled with a loss of 5 cents, or 0.1%, at $73.65 a barrel on ICE Futures Europe.Back on Nymex, October gasoline RBV24 rose 0.4% to end at $2.011 a gallon, while October heating oil HOV24 gained 0.5% to $2.148 a gallon.October natural gas NGV24 dropped 1.7% to close at $2.284 per million British thermal units.
Market drivers
The Energy Information Administration said Wednesday morning that U.S. crude inventories fell by 1.6 million barrels in the week ending Sept. 13. That's smaller than the 2.1-million-barrel drop expected by analysts surveyed by S&P Global Commodity Insight, but provided some relief after the American Petroleum Institute, an industry trade group, late Tuesday reported a rise in crude stocks.
The EIA said gasoline inventories rose by 100,000 barrels, while distillates, which include diesel fuel and heating oil, also rose by 100,000 barrels.
"The EIA storage report this morning was far less bearish than the API report on Tuesday, with Crude Oil up versus the very API down, and very small builds in both Gasoline and Distillate versus substantial builds in both in the API," said Robert Yawger, executive director for energy futures at Mizuho Securities,in a note.
Yawger said the EIA data was likely influenced by Hurricane Francine, with producers trying to load as many barrels as possible to get them moving before ports began to impose restrictions. "The problem with a 'Hurricane' report is that the number have a tendency to boomerang back in the opposite direction in the next week's report, after oil infrastructure comes back online," he wrote.
Oil futures rose Tuesday, with support tied in part to fears over a renewed rise in Middle East tensions after thousands of pagers used by operatives of Iran-backed Hezbollah in Lebanon exploded in an attack that the group blamed on Israel. A second round of attacks targeting walkie-talkies caused explosions across Lebanon on Wednesday, news reports said. Analysts registered little reaction to the news in the crude market.
-William Watts
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September 18, 2024 16:26 ET (20:26 GMT)
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