Oil Futures End Tuesday Lower

NEW YORK (DTN) -- New York Mercantile Exchange spot-month oil futures settled lower Tuesday afternoon, pressured by a stronger U.S. dollar, a stock market selloff and expectations that weekly oil statistics would show stock builds for U.S. crude oil and gasoline supply.

The financial market was spooked by what was viewed as hawkish testimony by Jerome Powell, the new chairman of the U.S. Federal Reserve, before Congress Tuesday.

While providing an upbeat economic assessment, Powell hinted at a faster pace of interest rate hikes in an effort to fight inflation. The comments rallied the dollar while pressing equities lower.

"The stock market fell when Powell said we could have three or four rate hikes and oil followed," said Phil Flynn, an analyst at Price Futures. "Oil was already overbought, so it didn't take much prodding by the stock market to fall."

The Dow Jones Industrial Average was down nearly 300 points, while the S&P 500 Index lost 35 points near the close. The dollar traded near a two-week high. The dollar and oil futures have an inverse trading relationship.

The oil futures market also sold-off in front of weekly supply reports that are expected to show builds in U.S. crude and gasoline inventories.

A survey by DTN showed estimates for a crude stock build of 3.75 million bbl for the week-ended Feb. 23. U.S. gasoline supply is expected to have climbed by 1.75 million bbl, while distillate fuel stocks are estimated to have been drawn down 1.75 million bbl in the week reviewed.

The American Petroleum Institute will release its oil report at 4:30 PM ET, while the Energy Information Administration's Weekly Petroleum Status Report is due out at 10:30 AM ET Wednesday.

NYMEX April WTI crude futures settled 90cts lower at $63.01 bbl while ICE April Brent crude futures declined 87cts to $66.63 bbl. May Brent futures settled down 77cts at $66.52 bbl.

NYMEX March RBOB futures slipped 2.33cts to settle at $1.8034 gallon and the April contract was down 1.85cts at a $1.9843 gallon settlement. March ULSD futures declined 2.29cts to settle at $1.9630 gallon, while the April contract dropped 1.88cts to a $1.9687 gallon settlement.

The lower settlements come ahead of the expirations of the ICE April Brent crude and March ULSD and RBOB futures contracts Wednesday afternoon.

George Orwel can be reached at george.orwel@dtn.com