By Victor Reklaitis and Sara Sjolin, MarketWatch
NEW YORK (MarketWatch) — Crude-oil futures turned negative Wednesday after a weekly supply report showed a surprise gain, and as traders waited for a key Federal Reserve decision.
Crude for July delivery CLN3 -0.31% dropped 21 cents, or 0.2%, to $98.23 a barrel on the New York Mercantile Exchange. It was trading around $98.50 shortly before the inventories data at 10:30 a.m. Eastern on Wednesday from the U.S. Energy Information Administration.
The EIA said supplies rose by 300,000 barrels for the week ended June 14, to 394.1 million barrels. A Platts survey of analysts forecast a 1 million-barrel decline, and the American Petroleum Institute said late Tuesday that crude supplies dropped by 4.3 million barrels.
Gasoline supplies increased by 200,000 barrels, while distillate stockpiles fell by 500,000 barrels, the EIA said. Analysts were looking for a rise of 1.2 million barrels in gasoline inventories and an increase of 300,000 barrels in distillate supplies.
On Tuesday, oil futures ended higher as Mideast tensions supported prices, then built on their gains in electronic trading after the API report. The July crude contract, which expires on Thursday, briefly traded as high as $99.01 early Wednesday, a level last seen in mid-September.
Crude for August delivery CLQ3 -0.31% , the most active contract, rose as high as $99.21 early Wednesday, but was last down 22 cents, or 0.2%, to $98.45 a barrel.
The Fed is scheduled to release its monetary-policy decision at 2 p.m. Eastern, followed by a news conference at 2:30 p.m. with Fed Chairman Ben Bernanke. Oil prices could see strong gains in late-afternoon action Wednesday if the central bank clearly signals that it plans to stick with its bond-buying program and other measures to help bolster U.S. economic growth, according to some analysts. Read about how to trade the Fed decision.
The EIA report, which is more closely watched, has failed to confirm API data viewed as bullish for oil prices. The API report was “supportive overall, with crude stocks falling more than expected on a combination of lower imports and higher refinery runs than anticipated,” said Citi Futures energy specialist Tim Evans in a note late Tuesday.
The API also said gasoline inventories increased by 900,000 barrels, while distillate stockpiles, which include heating oil and diesel, fell by 600,000 barrels. “The build in gasoline inventories was somewhat more than the consensus expectation but not enough to offset the supportive numbers in the other categories,” Evans wrote.
Platts, an oil-index publisher and unit of McGraw Hill Financial Inc. MHFI +0.36% , is itself in the headlines this week. The Wall Street Journal has reported the European Union is investigating the manipulation of benchmarks as part of a probe into whether traders skew prices of oil and other fuels for their own financial benefit.
Brent crude for August delivery UK:LCOQ3 -0.10% picked up 3 cents, or less than 0.1%, to trade at $106.05 a barrel.
Last week, inventory reports from both the API and the EIA were bearish, showing supply increases even as analysts had expected no change in inventory levels. U.S. crude-oil inventories had in previous days hit their highest level on record, as tracked by the EIA.
Elsewhere in the energy complex on Wednesday, July gasoline RBN3 +0.11% was roughly unchanged at $2.88 a gallon, while July heating oil HON3 +0.00% was also essentially flat at $2.96 a gallon.
Natural gas for July delivery NGN13 +1.10% moved up 4 cents, or 1.1%, to $3.95 per million British thermal units.
Victor Reklaitis is a New York-based markets writer for MarketWatch. Follow him on Twitter @VicRek.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin. Carla Mozee contributed to this report.
