DTN Oil Update
Oil Futures Down as Market Eyes Upcoming Fed Meeting
HOUSTON (DTN) -- Muted trading activity was seen Tuesday as market participants continued a wait-and-see mode ahead of the Federal Open Market Committee FOMC meeting on Dec. 18.
Front-month NYMEX WTI and Brent futures contract prices settled lower on the day, despite a weaker U.S. Dollar Index.
Since last week, the market has focused its attention on the much-anticipated Federal Reserve's decision to trim interest rates by 25 basis points (bp), after inflation data for November came in line with market expectations of an increase of 0.7% year-over-year, higher than the level reported in October.
Analysts expect that the Fed will continue gradually cutting interest rates next year to meet its goal of 2% inflation. The new administration of President-elect Donald Trump is getting ready to set new fiscal and trade policies as part of its economic agenda for the next four years.
On Wednesday, Dec. 18, oil traders will be focused on weekly Energy Information Administration (EIA) data for crude and fuel inventories for the week ended Dec. 13.
Last week, the EIA reported that domestic crude oil stockpiles increased by 700,000 barrels (bbl) in the week ended Dec. 6, an 814.5 million bbl hike week-over-week. Gasoline and diesel inventories rose 5.1 million bbl and 3.2 million bbl, to 220 million bbl and 121.3 million bbl, respectively.
Ample supplies of crude, coupled with decent demand are expected to continue putting downward pressure on U.S. fuel oil prices.â?¯
At 3:00 p.m. EST, the January WTI futures slipped $0.52 to $70.19 bbl, while February ICE futures contract declined $0.62 to $73.29 bbl. January RBOB futures fell by $0.0296 to $1.9461 gallon and front-month ULSD futures dropped $0.0321 to $2.2319 gallon. The U.S. Dollar Index was 106.45 down 0.94.
Maria Eugenia Garcia can be reached at Maria.Garcia@dtn.com
