Investing.com - Crude prices rose on Wednesday after the Federal
Reserve suggested monetary policy will remain loose for some time
to come, which offset a bearish supply report.
Low interest rates keep the greenback weak, which makes oil an
attractive buy on dollar-denominated exchanges.
On the New York Mercantile Exchange, West Texas Intermediate
crude for delivery in May traded at $99.18a barrel during U.S.
trading, up 0.33%. New York-traded oil futures hit a session low of
$98.36 a barrel and a high of $99.22 a barrel.
The May contract settled up 1.29% at $98.88 a barrel on
Nymex oil futures were likely to find support at $97.00 a
barrel, Monday's low, and resistance at $99.25 a barrel, Friday's
The U.S. Energy Information Administration said in its weekly
report that U.S. crude oil inventories rose by 5.9 million barrels
in the week ended March 14, above expectations for an increase of
2.6 million barrels.
Total U.S. crude oil inventories stood at 375.9 million barrels
as of last week.
The report also showed that total motor gasoline inventories
decreased by 1.5 million barrels, in line with forecasts, while
distillate stockpiles declined by 3.1 million barrels, compared to
expectations for a withdrawal of 625,000 barrels.
The data softened
, though arguably dovish language from the Fed bolstered the
The Fed earlier said it was leaving interest rates unchanged and
reduced the amount of bonds it buys each month to $55 billion from
$65 billion, both moves in line with expectations.
However, the Fed omitted previous language calling for rate hike
considerations if the unemployment rate approaches a 6.5%
threshold, a policy tool known as forward guidance.
Even though the economy is improving, a highly accommodative
monetary policy stance remains appropriate, the U.S. central bank
said, which boosted oil on sentiments that the U.S. will demand
more fuel and energy while interest rates remain low and make
commodities more attractive in dollar-denominated exchanges.
Elsewhere, on the ICE Futures Exchange in London, Brent oil
futures for May delivery were down 0.70% and trading at US$106.05 a
barrel, while the spread between the Brent and U.S. crude contracts
stood at US$6.87 a barrel.
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