DTN Oil Update
Oil Futures Edged Down on Ample Crude Stocks
HOUSTON (DTN) -- Oil futures edged lower Thursday, driven by reports of commercial crude inventory build and declining gasoline, distillates stocks last week, as well as the confirmation that the Federal Reserve will leave unchanged its interest rate.
The April NYMEX WTI futures contract edged down by $0.07 to $67.09 barrel (bbl) while the front-month ICE Brent futures contract was steady at $70.77 bbl. April RBOB futures contract inched up $0.0152 to $2.1544 gallon and April ULSD futures increased by $0.0015 to $2.2324 gallon.
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The U.S. Dollar Index rose by 0.53% to 103.62 against a basket of foreign currencies.
Energy Information Administration and American Petroleum Institute data showed another weekly build of commercial crude inventory, while gasoline and distillate supply stocks declined again last week.
The EIA reported Wednesday, March 19, commercial crude oil inventories in the U.S. rose by 1.7 million bbl to 437 million bbl in the week ended March 14. This was below the 4.593-million-bbl build reported by API for the same reference week.
Gasoline stocks dropped to a seven-week low by falling 500,000 bbl, week-over-week, to reach 240.6 million bbl, in the week ended March 14, above the 1.71 million bbl decrease reported by API for the same period.
Distillate fuel stocks recorded the steepest draw by falling 2.8 million bbl to 114.8 million bbl last week, according to EIA, which was larger than the 1.14-million-bbl fall API reported for the same week.
Meanwhile, the Federal Reserve maintained its interest rate policy unchanged Wednesday and reiterated its expectation to cut rates twice this year. The Fed stated "recent indicators suggest that economic activity has continued to expand at a solid pace. The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid."â?¯
The Fed's decision was in line with market expectations and helped set the bullish tone in the oil futures market, which had been under downward pressure due to concerns about the potential impact of tariffs imposed by the United States on imports from China, Canada, Mexico and the European Union, which could affect U.S. economy growth.
At the conclusion of the two-day meeting of the Federal Open Market Committeeâ?¯held on March 18-19, board members committed to supporting maximum employment and returning inflation to 2%, amid increasing "uncertainty around the economic outlook."
The FOMC also pledged to keep its target range for the federal funds rate at 4.25%-4.50% for this year, while lowering its forecast for U.S. economic growth to 1.7% in 2025, down from the 2.1% projected in December.
