WSJ: Oil Futures Fall as Traders Await Crude Inventories Data
By Brett Philbin
Oil futures fell Wednesday as traders awaited government data expected to show another decline in crude inventories, while concerns lingered over the timing of the end of the Federal Reserve's stimulus program.
Light, sweet crude for September delivery fell 55 cents, or 0.5%, to $104.77 a barrel on the New York Mercantile Exchange. Brent crude on ICE Futures Europe declined 91 cents, or 0.9%, to $107.26 a barrel.
At 10:30 a.m. EDT, the Energy Information Administration is expected to report a drop in stockpiles of 1.3 million barrels in the week ended Friday, according to a survey of analysts by Dow Jones Newswires.
The projected decline would come after a slight increase of 400,000 barrels the prior week, which would represent a continuation of the long-term trend of falling stockpiles. Declining inventories have helped fuel a rally in crude over the past six weeks, as railroad and pipeline companies are helping to remove a surplus in the Midwest and transporting it to refiners on the U.S. Gulf Coast.
A confirmation of a "nice draw" in oil inventories from the U.S. Department of Energy would help crude prices, but long-term investors are "looking for another catalyst" to start a rally in oil prices and they "don't have it right now," said Gene McGillian, a broker and analyst at Tradition Energy, an energy-investment adviser.
Another factor weighing on oil prices Wednesday was comment from Fed officials on Tuesday that they could begin winding down their $85 billion-a-month bond-buying program in September.
The stimulus measure, designed to give the U.S. economy a boost, has helped crude prices by weakening the dollar, making oil cheaper to buy using other currencies.
"It looks as if a lot of the momentum we saw when crude rallied up to $109 has evaporated and you're seeing growing worries that Fed might taper in September," Mr. McGillian said.
Meanwhile, front-month September reformulated gasoline blendstock, or RBOB, recently fell 1.79 cents, or 0.6%, to $2.8960 a gallon. September heating oil declined 3.80 cents, or 1.3%, to $2.9714 a gallon.
