Forexpros – Crude oil futures were largely unchanged on Wednesday, as oil traders stuck to the sidelines ahead of a closely-watched government report on U.S. crude supplies as well as the Federal Reserve’s rate statement due later in the day.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at USD98.87 a barrel during European morning trade, easing down 0.08%.
The March contract traded in a tight range of USD98.83, the daily low and USD99.36, the session’s high.
After markets closed Tuesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories climbed by 7.3 million barrels last week, significantly higher than expectations for a modest 0.8 million barrel gain.
Oil traders were looking forward to the U.S. Energy Information Administration’s weekly report on U.S. stockpiles of crude and refined products to gauge the strength of oil demand in the world’s largest oil consumer.
The report was expected to show that U.S. crude oil stockpiles rose by 0.9 million barrels last week, while gasoline supplies were forecast to increase by 2.2 million barrels.
Markets were also looking forward to the Federal Reserve’s policy-setting meeting later in the day for indications on how Fed officials see Europe’s debt problems impacting the U.S. economy, as well as the need for further stimulus measures.
The Fed was also expected to provide, for the first time in the central bank’s history, interest rate forecasts to markets, as well as its quarterly economic projections, timed to coincide with a news conference by Fed Chairman Ben Bernanke.
Meanwhile, debt-strapped Greece was clinging to hope of a last minute bond swap deal to avoid a default after euro zone officials rejected a final offer from the country’s private bondholders.
An agreement is necessary if Greece is to get the next tranche of bailout funds that would prevent a devastating debt default. Greece does not have enough money to cover a EUR14.5 billion bond repayment due March 20.
Oil prices continued to draw support from ongoing tensions between Iran and the West after the Islamic Republic again threatened to block shipments of crude through the Strait of Hormuz.
In his State of the Union address Tuesday, U.S. President Barack Obama warned Iran the U.S. would keep up pressure over its disputed nuclear program.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery added 0.23% to trade at USD110.28 a barrel, with the spread between the Brent and crude contracts standing at USD11.41 a barrel.
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