NEW YORK (MarketWatch) -- Crude-oil futures fell in volatile trading early Wednesday, playing off the coordinated move of the Federal Reserve and other central banks to slash interest rates, as traders await fresh data on U.S. petroleum supplies.
Crude for November delivery dropped 63 cents to stand at $89.43 a barrel in electronic trading on Globex.
Earlier Wednesday, benchmark crude fell to an intraday low of $86.05 a barrel.
In coordinated announcements, the Federal Reserve said it had cut its key lending rate by half a percentage point, to 1.5%.
The European Central Bank lowered the euro zone's refi rate to 3.75% from 4.25%, while the Bank of England also cut its key rate by half a point, to 4.5%. The Bank of Canada, the Swiss National Bank and the Swedish Riksbank cut their rates as well. See full story.
Financial markets are "hoping this is the silver bullet to restore confidence and market order, as central-bank officials and especially the Fed, are running out of bullets," said analysts at Action Economics.
On Tuesday, crude futures rose 2.6% to close at $90.06 a barrel on the New York Mercantile Exchange.
U.S. supply data loom
The Energy Department's will issue a weekly update on U.S. petroleum supplies at 10:35 a.m. Eastern. Expectations for what the data will show were mixed.
Analysts at MF Global expect crude supplies to have climbed 2.2 million barrels for the week ended Oct. 3. Distillate inventories, which include heating oil, likely fell by 900,000 barrels, while motor gasoline supplies will likely be unchanged for the week, the analysts said.
A survey of industry analysts conducted by Platts shows that, on average, analysts expect drawdown in crude stockpiles of 1 million barrels for last week. The survey also showed expectations for buildups of 1 million barrels in distillate supplies and 2 million barrels in gasoline supplies.
Also on the Globex Wednesday, November reformulated gasoline fell 4 cents to $2.03 a gallon and November heating oil dropped 3 cents to $2.48 a gallon.
Natural gas for November delivery fell 6 cents to $6.71 per million British thermal units.
