West Texas Intermediate fluctuated before Federal Reserve Chairman Ben S. Bernanke testifies to Congress and the Energy Department releases weekly data on oil inventories in the U.S., the world’s largest crude consumer.
Futures were little changed after sliding as much as 0.8 percent in New York. Bernanke, who has said the Fed may start reducing $85 billion in monthly bond purchases later this year, will appear before the House Financial Services Committee today. The Energy Department will probably report that U.S. crude inventories fell by 2 million barrels last week, a Bloomberg survey showed.
“People are going to realize that tapering of quantitative easing is on the cards, and there’s not going to be an escape from this,” said Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund. “That will probably strengthen the dollar, and although crude has rallied lately on supply issues, it will put a little bit of pressure on the oil market.”
WTI for August delivery was at $105.85 a barrel, 15 cents lower in electronic trading on the New York Mercantile Exchange as of 1:18 p.m. London time. It fell earlier as much as 89 cents to $105.11 a barrel. The volume of all futures traded was in line with the 100-day average. The contract lost 32 cents yesterday to $106, the lowest closing price since July 12.
Brent for September settlement declined as much as 84 cents, or 0.8 percent, to $107.30 a barrel on the London-based ICE Futures Europe exchange. The August contract yesterday expired at $109.40. The European benchmark grade was at a premium of $2.47 to WTI, compared with $3.40 yesterday.
Bernanke will appear before House members today and senators tomorrow to present the Fed’s semi-annual monetary policy report. His statement to the House Financial Services Committee is set for public release at 8:30 a.m. in Washington, 90 minutes before he delivers it to lawmakers. The Bloomberg Dollar Index added 0.3 percent.
The Energy Information Administration, the Energy Department’s statistical arm, is scheduled to release its inventory report at 10:30 a.m. in Washington. It will probably show gasoline supplies decreased by 1.5 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg. Distillate supplies are projected to climb by 1.5 million barrels.
U.S. crude stockpiles shrank by 2.6 million barrels last week, the American Petroleum Institute said yesterday, according to a person familiar with the data. The API reported that gasoline stockpiles rose by 2.6 million barrels last week, said the person.
The API began releasing its weekly supply statistics on a subscription basis this month. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its weekly survey.
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