The Oil market continues to trade highly volatile on Wednesday, as the WTI crude was seen trading lower for the second day in a row, while Brent dropped for third day. Investors are keeping focused on the FOMC minutes from the latest meeting to get possible hints on the Central Bank’s next step towards the scaling back of its stimulus program.
The North American crude edged 0.49% lower at $104.6 a barrel on New York’s NYMEX.
Brent Crude retreated for a third session and remained below the $110-level, falling 0.61% lower to $109.46 a barrel after its one week low ended Tuesday.
Oil Market – US Stockpiles
Despite the downbeat signals such as the shrinking of the US oil inventories and the tension in the Middle East, investors remain focused on the Fed minutes.
The world’s largest oil consumer US reported a further drop in stockpiles data on Tuesday, while the American Petroleum Institute (API) posted data that showed shrinking fuel inventories. The Gasoline stockpiles declined 3.7 million barrels and distillate inventories declined 1.8 million barrels in the week ended August 16.
Another report is expected to be released today by the Energy Information Administration and it’s expected to show that the US crude inventories shrank by 1.25 million barrels to 359.2 million last week, the lowest since September.
Analysts is expecting to see a fall in US gasoline inventories by 1.25 barrels in the week ended August 16 and Distillate inventories probably increased by 750,000 barrels, while refinery operating rates is expected to show a drop by 0.55 of a percentage point .
The commodity market has been driven by the US stimulus tapering recently as investors are concerned that tapering of the stimulus program would affect the market and lead to a huge slid in commodity prices. The Federal Reserve’s (Fed) quantitative easing (QE) program has been adding $85 billion monthly into the economy which have been helping the commodity and oil market.
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