WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and the Brent contract on the Intercontinental Exchange settled lower on Wednesday. Futures were under pressure from bearish government data released midmorning Wednesday, paring losses in afternoon trade, with West Texas Intermediate limiting the decline on weakness in the U.S. dollar.
At settlement, NYMEX January West Texas Intermediate futures dropped $0.48 to $58.76 per barrel (bbl), and ICE February Brent contract fell $0.62 to $63.72 per bbl. NYMEX January ULSD futures declined 3.67 cents to $1.9288 per gallon and January RBOB contract retreated 2.64 cents to a $1.6261-per-gallon settlement.
The Federal Open Market Committee left the key federal funds rate unchanged between 1.5% and 1.75% after three previous 25-basis-point cuts as widely expected, but the U.S. dollar weakened to a one-month low as the central bank publicized its decision at 2 p.m. EST.
During his news conference following the two-day meeting, Fed Chairman Jerome Powell said he would need to see "persistent" and "significant" inflation before he would vote to lift rates. The message interpreted by the market is that the central bank will stand pat on rates in 2020, giving a modest boost to equities while weakening the dollar.
Data released earlier Wednesday shows inflation remains tame. The Bureau of Labor Statistics this morning reported the Consumer Price Index edged up 0.3% in November while 2.1% higher from year ago.
Powell's comments come ahead of Thursday morning's announcement by the European Central Bank, which is not expected to adjust policy after reintroducing quantitative easing in September, with its bond buying program beginning in November. Earlier this month, the Bank of Japan also embarked on monetary easing, as world economies respond to sluggish economic growth.
The Federal Reserve in its quarterly update left unchanged September projections for annualized U.S. gross domestic product growth at 2.2% this year and 2% in 2020, while lifting its longer run range 0.1% to 1.7% by 2.2%.
Oil futures still registered losses after U.S. commercial crude stocks ran contrary to expectations for a drawdown and increased 821,984 bbl to 447.9 million bbl during the week-ended Dec. 6, according to the Energy Information Administration, the fifth weekly build during the past six weeks.
The build came as refinery throughputs declined 201,000 barrels per day (bpd) to 16.6 million bpd, about 5% below a year ago, while imports jumped a massive 899,000 bpd from the previous week to 6.9 million bpd, overwhelming a 265,000 bpd increase in exports to 3.4 million bpd.
EIA also reported large builds for oil products, with gasoline supply up 5.4 million bbl during the first week of December, the third-largest weekly build of the year, lifting stocks to 5% above the five-year average. Distillate fuel inventories posted a third straight weekly build, rising 4.1 million bbl to 123.6 million bbl, although 9% below the five-year average.
Total commercial petroleum inventories jumped an eye popping 17.2 million bbl last week, EIA data shows.
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