DTN Oil Update
WTI Rises to $58 on Mixed U.S. Inventories, Fed Rate Cut
SECAUCUS, NJ (DTN) -- ULSD and crude oil futures rose Wednesday, rebounding from two straight days of losses, while gasoline prices dipped following a mixed weekly inventory report from the U.S. Energy Information Administration (EIA).
The Federal Reserve's decision on Wednesday to cut U.S. interest rates by 25 basis points for a third straight time this year added to the sentiment in energy markets.
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Fuel prices are typically supported by measures that stimulate economic activity, and the Fed rate cut pushed up ULSD futures prices despite higher inventories the EIA reported for distillates -- the main feedstock for diesel.
The front-month NYMEX ULSD futures for delivery in January rose $0.0179 to $2.278 gallon.
Distillate inventories grew by 2.5 million bbl to 116.8 million bbl for the week ended December 5 that added to a prior growth of 2.1 million bbl, according to EIA's Weekly Petroleum Status Report released Wednesday.
RBOB futures contract for January delivery fell $0.0044 to $1.7853 gallon. The EIA said total motor gasoline inventories increased by 6.4 million bbl to 220.8 million bbl last week, following a prior weekly rise of 4.5 million bbl.
In crude oil, the NYMEX WTI futures contract for January delivery settled up $0.21 at $58.46 bbl, after a two-week low of $57.67 earlier in the session.
ICE Brent for February shipments climbed $0.37 bbl to $62.32 bbl, rebounding from a two-week low of $61.37 bbl.
The EIA said commercial crude stocks fell by 1.8 million bbl to 425.7 million bbl during the week ended December 5, following the previous week's climb of 600,000 bbl.
Crude prices had tumbled about 3% in the prior two sessions on concerns over the growing volumes of oil on water as U.S. and European sanctions that prevented Russian oil from reaching buyers in particularly India and China. Larger discounts for Russian Urals crude had also weighed on Brent and WTI, traders said.