Prices under $83 a barrel after surprise increase in inventories
By Claudia Assis and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil prices declined further on Wednesday as data showed a surprise increase in supplies, and as investors remained cautious ahead of the U.S. Federal Reserve’s policy announcement later in the day.
Light, sweet crude-oil futures for July delivery CLN2 -2.26% declined $1.43, or 1.7%, to $82.60 a barrel on the New York Mercantile Exchange, hovering at their lowest level since October.
Prices had traded at $83.02 a barrel before the release of Energy Information Administration data.
The EIA report showed crude supplies rose by 2.9 million barrels in the week ended June 15. That contrasts with expectations of a decline of 600,000 barrels, according to analysts polled by Platts.
The EIA also said gasoline inventories rose by 900,000 barrels, and supplies of distillates rose by 1.2 million barrels. Analysts had expected gasoline and distillates stockpiles to both rise by 600,000 barrels.
July futures for gasoline RBN2 -1.20% also added to losses, recently off 2 cents, or 0.7%, to $2.62 a gallon.
Heating oil for July delivery HON2 -1.07% turned lower, and traded down 1 cent, or 0.4%, to $2.63 per gallon.
Investors are cautious ahead of the Fed statement and a press conference by Chairman Ben Bernanke later on, with markets hopeful some hint of additional stimulus will be forthcoming. Read a preview of the FOMC meeting.
Nymex crude futures have been struggling to break back above the $84.30 level on concerns that a deteriorating global economic outlook would pull oil prices down further, said David Morrison, senior market strategist at GFT Markets.
“However, there are concerns that tensions between Iran and the West could be on the rise again ahead of European Union sanctions, which are due to begin in July. This could see speculative buyers return to the market,” he added.
The dollar was slightly weaker compared to other major currencies. The ICE dollar index DXY -0.05% , which compares the U.S. unit against 6 major global rivals including the euro, was at 81.333, from 81.365 in late North American trading Tuesday.
In other trading, July natural-gas futures NGN12 -1.10% declined 2 cents, or 0.8%, to $2.52 per million British thermal units. The product started the week settling at a three-week high due to the weather forecast of warmer-than-usual temperatures but has since lost steam.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
