© Reuters.
LCO
-0.42%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
CL
-0.36%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
By Ambar Warrick
Investing.com– Oil prices fell slightly on Wednesday after three sessions of stellar gains as data pointed to an unexpected build in U.S. inventories despite a major pipeline outage, while markets awaited more cues on monetary policy from the conclusion of a Federal Reserve meeting.
Crude markets rallied sharply over the past three sessions as an outage in the Canada-U.S. Keystone Pipeline and softer-than-expected U.S. inflation data drove up hopes that supplies will tighten while economic conditions will improve and spur a recovery in demand.
But industry data released on Tuesday showed that U.S. oil inventories likely grew more by nearly 8 million barrels in the week to December 9, subverting expectations for a draw of 3.9 million barrels.
The reading likely heralds a similar trend in official government data due later in the day, which is forecast to show inventories fell by 3.6 million barrels. Markets will also be watching for any more releases from the U.S. Strategic Petroleum Reserve, after the government stopped drawing from the reserve last month.
Brent oil futures fell 0.4% to $80.13 a barrel in early Asian trade, while West Texas Intermediate crude futures sank 0.6% to $74.94 a barrel. Both contracts rallied nearly 5% in the past three sessions.
Oil prices surged over 2% on Tuesday after data showed U.S. consumer inflation eased more than expected in November, indicating that price pressures in the country have peaked and are likely to continue falling. This triggered steep losses in the dollar, benefiting crude prices.
Lower consumer inflation bodes well for retail fuel buying in the U.S., which is a major driver of demand.
Focus is now on the conclusion of a two-day Fed meeting later on Wednesday. While the bank is widely expected to hike interest rates by 50 basis points, markets will be focused on any potential changes to its hawkish stance against inflation, given that price pressures in the U.S. have eased for two consecutive months.
Early indicators from money markets suggest that markets are pricing in a 25 bps hike in the Fed’s next meeting in February 2023.
Still, consumer inflation is well above the Fed’s target range, which may see the bank retain its hawkish stance.
Rising interest rates weighed heavily on crude prices this year by boosting the dollar, which made commodities priced in the greenback more expensive. Tighter monetary conditions also weighed on economic activity, stymying demand.
This, coupled with weakening demand in China, saw oil prices fall to a one-year low last week. While China has now announced the scaling back of its strict anti-COVID policies, rising COVID-19 cases in the country saw investors remain uncertain over a near-term recovery in demand.
Source: Investing.com
