NEW YORK (Reuters) - Brent crude edged up and U.S. crude eased on Wednesday in volatile trading as both contracts trimmed losses after the Federal Reserve left the outlook for interest rate increases uncertain, brokers and analysts said.
The Fed said the economy was likely strong enough to support an interest rate increase by the end of the year, although it lowered expectations for 2015 economic growth because of a weak start to the year. [MKTS/GLOB]
“The Fed again cited international concerns and the lower growth, opening the door for delaying the expected rate hike and keeping liquidity boosted,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
The dollar index weakened, helping dollar-denominated crude recover.
Brent August crude rose 17 cents to settle at $63.87, having swung from $62.60 to $65.47 and ending back below its 50-day moving average of $64.16.
U.S. July crude dipped 5 cents to settle at $59.92, having traded from $58.85 to $61.38.
Crude and refined products oil futures turned sharply lower after government data showed a surprise gasoline inventory build last week.
Concerns about Greece’s debt problems and the potential effect on Europe’s demand for petroleum also provided pressure.
U.S. July RBOB gasoline fell 2.40 cents to settle at $2.1005 a gallon. It fell as low as $2.0726 after soaring to $2.1858, the strongest front-month price since November.
Gasoline inventories rose unexpectedly and crude oil stocks at the Cushing, Oklahoma, hub rose for the first time since April, while refinery utilization fell, the Energy Information Administration (EIA) said on Wednesday. [EIA/S]
Crude inventories fell by 2.7 million barrels, the EIA said.
While the EIA’s slip was more than the expected draw of 1.7 million barrels, the drop was less than the 2.9-million-barrel slide reported on Tuesday by industry group American Petroleum Institute (API). [API/S]
“The drawdown in crude oil inventories was expected, so its effect is muted, and the rise in Cushing, Oklahoma, inventories diminishes the headline number quite a bit,” said John Kilduff, partner at Again Capital LLC in New York.
The EIA showed gasoline stocks rose by 460,000 barrels, compared with expectations in a Reuters poll for a 314,000 barrel drop and in sharp contrast to the fall of 2.9 million barrels reported by the API.
U.S. ultra-low sulfur diesel (ULSD) futures also turned lower on the EIA data, although the inventory build reported was less than expectations and ULSD managed to settle 2.49 cents higher at $1.9098 a gallon.
Additional reporting by Simon Falush in London and Henning Gloystein in Singapore; Editing by David Goodman and and Andre Grenon