Forexpros – Crude oil futures fell in Asian trading on Thursday after U.S. inventories posted surprisingly high gains last week, while the market shrugged off the Federal Reserve’s announcement to extend a Treasury shuffle-up program to keep interest rates low.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at USD80.76 a barrel on Friday, down 0.85%, off from a session high of USD81.19 and up from an earlier session low of USD80.72.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 2.86 million barrels during the week ending June 15, well above and beyond expectations for a decline of 1.11 million barrels. U.S. crude supplies fell by 0.19 million barrels in the preceding week.
Total U.S. crude oil inventories stood at 387.3 million barrels as of last week, just below the highest level since 1990.
Total motor gasoline inventories increased by 0.94 million barrels, above expectations for a gain of 0.81 million barrels, after falling by 1.72 million barrels in the preceding week.
News of increasing U.S. stockpiles overshadowed the Federal Reserve’s announcement it will extend its Operation Twist program, under which it buys longer-dated Treasury instruments in the market and sells short-dated bonds in tandem with the aim of ensuring interest rates stay low.
Operation Twist is seen as a more modest monetary policy tool than outright bond purchases from banks, known as quantitative easing, which sends oil gaining.
The Federal Reserve said it would act and introduce more stimulus measures if necessary, which sent oil falling on sentiment that rising inventories coupled with a cooling economy translates into less need for fuels and energy going forward.
On the ICE Futures Exchange, Brent oil futures for August delivery were up 0.10% and trading at USD92.66 a barrel, up USD11.90 from its U.S. counterpart.
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